Price trend

Cotton prices declined slightly in the first half of the month, primarily due to increased expectations of a bumper domestic cotton harvest and, in response to downstream demand, insufficient quality cotton during the textile market's peak season. Domestic cotton prices continued to decline. According to the SunSirs commodity market analysis system, as of September 15, the spot price of 3128B grade cotton lint was 15,256 RMB/ton, down 1.44% from the beginning of the month.

Analysis review

On the supply side, the supply of old cotton had further decreased, and national commercial inventories were on a downward trend. As of September 12, 2025, total commercial cotton inventories stood at 1.2718 million tons, a decrease of 143,800 tons from the previous week. Cotton companies were running low on inventory, and sales enthusiasm was generally low. As of September 12, downstream and end-users were reluctant to purchase, and market demand was subdued. Textile companies had not yet seen concentrated purchasing or stockpiling of cotton.

As the new cotton crop enters the market, expectations of a bumper harvest were gradually translating into actual supply pressure. Major institutions generally predicted that domestic cotton production would exceed 7 million tons in 2025. According to data from the National Cotton Market Monitoring System, as of September 11, the national cotton harvest rate was 0.3%, a 0.1 percentage point increase year-on-year and a 0.1 percentage point decrease from the average of the past four years. Mechanized harvesting is expected to begin in northern Xinjiang cotton regions around September 20.

On the demand side, the textile market's peak season recovery remained slow. As of September 11, textile mills in major regions were operating at 66.5%, a 0.76% increase from the previous month. Downstream orders saw a slight increase, and mainland textile mills saw a slight increase in operating rates, but overall operating rates remained low. New orders from downstream markets were limited, and yarn purchases were slow.

Exports in the textile market have cooled. According to customs data, textile and clothing exports in August were $26.5 billion, down 5% year-on-year and 0.8% month-on-month. From January to August, the cumulative exports of textiles and clothing were $197.2 billion, down 0.2% year-on-year, failing to maintain the weak growth trend of the first seven months.

Internationally, easing inflationary pressures in the United States have heightened expectations of a Federal Reserve rate cut, providing some support to financial markets and halting the decline in international cotton prices. However, price increases have been limited by the weak export market. The average settlement price of the main New York cotton futures contract was 66.58 cents per pound, up 0.46 cents per pound, or 0.7%, from the previous week. Both US cotton contracts and shipments declined in the latest week. For the week ending September 4th, US cotton export contracts totaled 29,700 tons, a decrease of 26,200 tons, or 47%, from the previous week. US cotton export shipments totaled 30,800 tons, down 5,300 tons, or 16%, from the previous week.

According to the U.S. Department of Agriculture's September forecast, global cotton production, consumption, and trade volumes were revised upwards, while beginning and ending stocks were revised downwards. Global cotton consumption in 2025/26 is projected to exceed production by 250,000 tons. Specifically, production is projected to be 25.62 million tons, up 230,000 tons from the previous month and down 340,000 tons from the previous year. Consumption is projected to be 25.87 million tons, up 180,000 tons from the previous month and down 70,000 tons from the previous year. Futures stocks are projected to be 15.924 million tons, down 168,000 tons from the previous month and down 201,000 tons from the previous year, the lowest level in nearly four years.

Future outlook:

Overall, as the new cotton harvest approaching, the impact of reduced spot supply of old cotton on the market was weakening. Large-scale machine-picked cotton harvesting in northern Xinjiang will begin at the end of the month. As of September 12, the purchase price of hand-picked cotton in southern Xinjiang remained firm, providing some boost to market sentiment. However, the overall recovery of the downstream textile market remained slow, with low weaving machine utilization rates, which had put a damper on raw material procurement. Domestic cotton prices are expected to be dominated by pressure from new cotton supply in the short term, and the market may be volatile and weaker. Further attention should be paid to expectations of a rush to harvest new cotton and changes in demand.

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