The new-season cotton procurement battle in Xinjiang has started earlier than usual. Different from previous years, the opening prices show a clear divergence: hand-picked cotton is strong while machine-picked cotton remains weak. This reflects the dual pressure of tight cash flow for ginners and sluggish demand from textile mills. For downstream buyers, this means rising uncertainty in raw material costs, and the window for locking in prices may be shorter than before.
Background
Cotton bolls in southern Xinjiang have opened more than halfway, and farmers in Hotan, Kashgar, Aksu, and Bayingolin have started applying defoliants since early September, advancing the seed cotton harvest by at least one week compared with last year. In northern Xinjiang, including Bole, Shawan, Jinghe, and Kuitun, bolls are just beginning to open, with defoliant application expected from mid-to-late September, keeping the harvest schedule roughly unchanged or slightly earlier than last year. This accelerated timeline shortens the preparation period before procurement and amplifies speculation about production volumes.
Meanwhile, the Zhengzhou Cotton Futures main contract has reclaimed the 17,000 yuan/ton level. Combined with expectations of a strong 'golden September and silver October' season, some cotton brokers in southern Xinjiang and ginners with high-price wadding orders have taken the lead in raising hand-picked seed cotton quotes. In Bachu and Makit counties of Kashgar, hand-picked seed cotton with 40-42% lint and moisture below 12% has risen to 8.5-8.7 yuan/kg, a notable increase from earlier levels. Cottonseed prices have also strengthened to around 2.55 yuan/kg, providing additional support to seed cotton quotes.
Industry Impact
Pre-purchase prices for machine-picked cotton have increased only moderately. Recent pre-purchase offers of 7.5-7.7 yuan/kg from some ginners in southern Xinjiang and a few in the north are merely 0.1-0.2 yuan/kg higher than in early-to-mid August, with most enterprises staying on the sidelines. Tighter credit review and increased self-financing pressure are the main reasons. Additionally, continued sales of central reserve cotton, weaker-than-expected new orders at textile mills (with a high share of short, scattered, and small orders), Sino-US trade uncertainties, and geopolitical risks have all suppressed ginners' willingness to raise prices.
This divergence between hot hand-picked and cold machine-picked cotton indicates that the scarcity premium for high-grade cotton is emerging, but the pricing power for large-scale machine-picked cotton remains in the hands of buyers. For textile enterprises, raw material procurement costs may rise passively due to higher hand-picked cotton prices, but if machine-picked cotton prices stay low, they can hedge risks by adjusting their cotton mix.
From the perspective of industrial chain transmission, higher seed cotton procurement prices will eventually be reflected in lint cotton costs, thereby affecting yarn quotations. Given the slow recovery of downstream textile demand, cost-push price increases are difficult to pass on effectively, potentially squeezing spinners' profit margins further. Therefore, buyers should closely monitor the procurement progress and price trends to avoid concentrated stockpiling at high prices.