The reserve cotton floor price has been adjusted to 17,228 yuan per ton, a figure that reflects the ongoing tug-of-war between policy and market forces. For textile mills, the floor price is not just a benchmark for bidding, but a key indicator for judging future raw material costs and purchasing pace.
Event Background
China National Cotton Reserves Corporation launched the 2026 central reserve cotton sales on July 20, with the 7th week (August 31 to September 4) floor price set at 17,228 yuan per ton (based on standard grade 3128B). This price is not an isolated figure; it is dynamically calculated according to national department requirements and the annual sales announcement, combined with cotton inspection results and the quality differential table published by the China Cotton Association.
Notably, the floor price has been adjusted for several consecutive weeks, and the cumulative change reflects a trend of refined policy control. Compared with the same period last year, the current floor price is at a relatively high level, meaning that the cost pressure on mills' raw material procurement has not eased, but remains rigid under policy support.
From the perspective of industrial belt reactions, ginning factories and traders in major cotton-producing areas such as Xinjiang, Shandong, and Henan are highly sensitive to the floor price trend, and some have adjusted their seed cotton purchase expectations. Downstream yarn markets, facing high raw material costs, generally show a willingness to raise prices, but the recovery of terminal orders is not strong enough to fully absorb the cost transmission.
Industry Impact
The consecutive adjustment of the floor price directly affects the purchasing pace of textile mills. For small and medium-sized mills, tight capital chains and low raw material inventories coexist, and the stability of the floor price becomes an important reference for making procurement plans. If the floor price remains high, enterprises may be forced to reduce bidding volumes and seek alternatives such as imported cotton or spot market supplies, but this involves issues of quota and quality matching.
Large mills pay more attention to the execution details of the quality differential table. Since the actual floor price of each daily listed batch is calculated based on inspection results and the quality differential table, differences in cotton quality across batches will directly lead to deviations between actual transaction prices and the floor price. This means that simply tracking the floor price is not enough to precisely control costs; enterprises need to establish a more detailed quality assessment system.
From the perspective of upstream-downstream transmission, the trend of the reserve cotton floor price is linked with the Zhengzhou cotton futures, thereby affecting the pricing of cotton yarn, grey fabric, and even garment fabrics. If the floor price remains high, yarn prices are prone to rise but difficult to fall, but the profit margins of downstream weaving enterprises will be further compressed, potentially triggering a risk of order migration to Southeast Asia. This transmission effect is particularly noteworthy before the peak season for autumn and winter fabric orders.