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Home > Cotton Lint News > News Detail
Cotton Lint News
SunSirs: The US-China Tariff Policy Was Postponed, and Cotton Prices Rose Slightly
August 20 2025 09:55:36SunSirs(John)

Price trend

Domestic cotton spot prices saw a slight, but limited, rise last week. According to the SunSirs commodity market analysis system, as of August 18, the spot price of 3128B grade lint cotton was 15,235 RMB/ton, a weekly increase of 0.37%.

Analysis review

On the macro level: The announcement of a tariff extension between China and the United States has temporarily mitigated external market risks. On August 12, China and the United States simultaneously announced a 90-day extension of the tariff moratorium, maintaining the tariff rates on both sides (25% increase for Chinese cotton imports and 30% increase for US textiles and apparel imports from China). Driven by this factor, Zhengzhou cotton prices rebounded sharply, posting a four-day upward trend. The average settlement price of the main Zhengzhou cotton futures contract was 13,992 RMB/ton, up 325 RMB/ton, or 2.4%, from the previous week.

On the supply side, domestic commercial cotton inventories continued to decline. As of August 15, China's commercial cotton inventory stood at 1.8561 million tons, a weekly decrease of 150,600 tons. Cotton companies were active in year-end sales. As of August 14, the national sales rate reached 97.9%, a year-on-year increase of 5.8 percentage points. Regarding new cotton, Xinjiang cotton was temporarily growing well overall, with harvest expected to be brought forward to mid-September. The market supply was in a tight balance.

On the demand side: With the traditional peak season approaching in the downstream textile market, companies were increasingly interested in purchasing cotton raw materials. Cotton yarn prices were  fluctuating. While most textile companies raised prices due to raw material support, actual transactions still involved price concessions. Some companies had high inventories, making price increases difficult, and textile companies were somewhat lacking confidence in the peak season.

Internationally, the USDA's latest monthly report significantly lowered both U.S. and global cotton production. The shift in supply and demand from loose to tight supported cotton prices, which peaked at 68.50 cents/lb last week. Following this rise, ICE cotton futures continued to decline as investors took profits at high levels. The settlement price of the main ICE cotton futures contract averaged 67.62 cents/lb, up 0.90 cents/lb, or 1.3%, from the previous week. The International Cotton Index (M), representing the average landed price of imported cotton at major ports in China, averaged 74.97 cents/lb, equivalent to an import cost of 13,014 RMB/ton (calculated at a 1% tariff, excluding port and freight charges), up 127 RMB/ton, or 1.0%, from the previous week.

The U.S. Department of Agriculture's August supply and demand report is a key market focus. The report shows that U.S. cotton planting area for the 2025/26 marketing year is expected to be 9.28 million acres, down 8.3% from the July estimate of 10.12 million acres. Production is projected to fall by 303,000 tons from the previous month to 2.876 million tons, down 50,000 tons year-on-year. Consequently, exports are projected to fall by 109,000 tons. Beginning stocks are projected to fall by 246,000 tons due to increased exports in the 2024/25 marketing year, resulting in a corresponding decrease in ending stocks by 218,000 tons.

The global supply and demand landscape is tightening simultaneously. The USDA report lowered global cotton production, consumption, trade, and beginning and ending stocks for the 2025/26 fiscal year. Production was reduced by 392,000 tons; global consumption by 28,000 tons; trade by 239,000 tons; and beginning stocks by 377,000 tons. With the reductions in beginning stocks and production, ending stocks for the 2025/26 fiscal year were also reduced by 743,000 tons. The USDA report's revisions far exceeded expectations, sending US cotton prices sharply higher following the release.

Market outlook

Overall, the extension of the US-China tariff reprieve was temporarily supporting international cotton prices. However, the high tariffs imposed by the US on most of its trading partners were weakening future textile and apparel imports, leaving little room for substantial upward momentum in international cotton prices. Domestically, total textile and apparel retail sales increased by 1.8% year-on-year in July, down 1 percentage point from the previous month, indicating a slowdown in growth momentum. Textile companies are closely watching demand during the peak season in September. In the short term, cotton prices are expected to fluctuate to be stronger amidst a tight supply environment. Further attention will be paid to the supply situation and actual downstream orders before the new cotton crop hits the market.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.

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