Reserve Cotton Floor Price Keeps Falling, Weaving Mills Face Narrowing Stock-up Window

17,228 yuan per ton—this is the floor price for central reserve cotton sales in the 7th week of 2026 (August 31-September 4), another decline from the previous week. The consecutive drop reflects the policy side's determination to stabilize the cotton market, and it also means textile enterprises are in a delicate stock-up window.

Price Decline Channel and Policy Signals

The floor price, based on the standard grade 3128B, is adjusted weekly. The 7th week's floor price moved further down, continuing the overall downward trend since sales started on July 20. This price signal is not isolated; it aligns with the fundamental picture of ample domestic cotton supply and weak downstream demand.

From a supply chain perspective, the lower floor price directly reduces raw material procurement costs for spinning mills, especially for small and medium-sized yarn factories, making reserve cotton increasingly cost-effective. However, the price drop also intensifies wait-and-see sentiment—some enterprises worry about buying at a falling price and postpone purchases.

Notably, the floor price for each daily batch is not uniform; it is calculated based on notarized inspection results and the quality differential table published by the China Cotton Association. This means the actual transaction spread between high-grade and low-grade cotton may widen, leaving room for premiums on quality resources.

Industrial Impact: Restocking Rhythm and Cost Game

For spinning mills, the core contradiction is balancing "restocking" versus "waiting." On one hand, the new cotton harvest is expected from late September to October, which will intensify supply pressure and may push prices further down. On the other hand, waiting too long risks a rush for high-quality cotton and rising spot procurement costs.

Historically, the reserve cotton floor price is seen as a "policy bottom." When it falls below enterprises' psychological thresholds, it attracts just-in-time demand. The 7th week's floor price is close to the breakeven line for some enterprises, and transaction volumes are expected to pick up next week.

For upstream ginners, the lower floor price implies pressure on new cotton purchase prices, making seed cotton procurement more cautious. For downstream fabric mills and garment manufacturers, yarn prices may weaken with cotton, helping ease cost pressures, but the recovery of end-order demand remains the key variable determining the health of the entire chain.

Practical Recommendations

For Buyers - Build positions in batches: Avoid a one-time full position; split purchases into 3-4 batches after each weekly floor price announcement to average costs. - Focus on quality premiums/discounts: Prioritize high-grade cotton, calculate actual delivered cost using the quality differential table, and avoid the "low price, low quality" trap. - Lock in forward resources: If futures prices are lower than the reserve floor price plus delivery costs, consider buying forward contracts for hedging.

For Foreign Trade Enterprises - Shorten quotation cycles: With volatile cotton prices, reduce quotation validity from 30 days to 15 days and include raw material price linkage clauses. - Hedge currency and tariffs: Monitor RMB exchange rates and sliding-duty policies on imported cotton; if the domestic-international price spread widens, consider increasing imported cotton usage. - Communicate with clients early: Proactively explain the downward trend in raw material costs to overseas clients, gain an edge in price negotiations, while avoiding default risks caused by rapid price drops.