At 17,228 yuan per ton, the floor price for the 7th week (August 31-September 4) of central reserve cotton sales in 2026 signals a clear policy intention to stabilize the market and reduce raw material costs for textile mills. For mills that have been waiting on the sidelines, this may be a procurement window worth serious evaluation.
Background
China Reserve Cotton Management Co. started the 2026 central reserve cotton sales on July 20, announcing a floor price each week. The 7th week's price is based on the standard grade 3128B, with daily lot prices calculated according to cotton inspection results and the quality differential table published by the China Cotton Association. This means actual floor prices vary by lot, requiring mills to assess quality metrics carefully.
The floor price is not set in isolation; it reflects national policy responses to market supply-demand dynamics. Recent trends show a downward trajectory, consistent with weaker domestic and international cotton prices and soft downstream demand. For textile mills, reserve cotton serves as an important supplementary raw material channel, and its price directly affects procurement costs and inventory strategies.
Industry Impact
The impact of a lower floor price is layered across the textile chain. For yarn producers, raw material cost pressure may ease, especially for those who purchased at higher prices earlier; they can dilute average costs by bidding for reserve cotton. However, quality differences (grade, length, micronaire) compared with spot market cotton may reduce efficiency, so the floor price should not be the sole decision factor.
For cotton traders and futures markets, a lower floor price may further suppress spot price expectations. With downstream orders yet to recover, mill operating rates remain low, and procurement is mostly hand-to-mouth. Increased reserve supply adds to market availability, likely keeping prices under pressure in the short term. Conversely, cheaper cotton helps lower production costs, enhancing competitiveness for export orders.
Across regional industrial clusters in Xinjiang, Shandong, and Henan, responses vary. Large mills with ample capital can flexibly participate in auctions, while small and medium enterprises are more concerned about capital occupation and quality matching. It is advisable for companies to rationally evaluate bidding volumes and target prices based on their order books and financial positions.