Price trend:

As of October 20, domestic cotton harvesting was temporarily entering its peak season, with harvest progress reaching nearly 80% in northern Xinjiang and about 30% in southern Xinjiang. Supply pressure was gradually increasing, and downstream textile companies were reluctant to restock, resulting in market demand falling short of expectations. According to the SunSirs Commodity Market Analysis System, as of October 20th, the spot price of 3128B grade cotton lint was 14,689 RMB/ton, a weekly decline of 0.79%.

Analysis review

On the cost side: The new cotton purchasing market was temporoarily showing signs of a slight recovery. Thanks to sunny weather in Xinjiang, the moisture content of seed cotton had further decreased, significantly boosting processing companies' purchasing enthusiasm. This year, the picking and delivery progress of new cotton in Xinjiang is faster than last year. As of October 15th, the cotton picking progress in Xinjiang was 57.5% and the delivery progress was 40.1%, respectively, 5.6 and 11.9 percentage points faster than last year.

The purchase price of machine-picked cotton across Xinjiang showed slight divergence. In Aksu and Bayingol Prefecture in southern Xinjiang, the price was significantly higher than in northern Xinjiang. Last week, the purchase price was concentrated around 6.2-6.3 RMB/kg, while in northern Xinjiang, the price was around 6.0-6.1 RMB/kg. The purchase price of hand-picked cotton continued its downward trend, concentrating between 6.8-7.1 RMB/kg.

On the supply side: According to customs statistics, China's cotton imports reached 100,000 tons in September 2025, a 42.9% increase from the previous month (70,000 tons) and a 20,000-ton decrease (18.7%) from the previous year (120,000 tons). From January to September 2025, China's cumulative cotton imports reached 680,000 tons, a 69.8% decrease from the previous year. This significant decline in cotton imports this year is beneficial to domestic cotton consumption.

Internationally, ICE cotton futures saw widespread declines in external financial, energy, and grain markets due to US President Trump's tweets threatening additional tariffs, dragging down cotton prices, which hit a six-month low. The continued absence of key data such as the USDA monthly report and US cotton exports heightened market uncertainty. However, after cotton prices hit their lows, speculative short-covering and bargain-hunting followed, and optimism about easing trade tensions persisted, leading to a rebound in ICE cotton futures. The weekly average settlement price of the main ICE cotton futures contract was 65.35 cents/lb, up 0.79 cents/lb, or 1.2%, from the previous week.

On the demand side, the cotton textile market was generally weak, with post-holiday trading activity subdued. Textile companies were experiencing limited peak season activity, with finished product sales remaining sluggish. However, cotton companies were showing strong sales momentum. With lint prices continuing to fall, textile companies were purchasing cotton raw materials at low prices. As of October 16th, textile mills in major regions were operating at 65.6%, a 0.20% increase from the previous week. Downstream textile companies were not actively stocking up, with purchases primarily focused on small, essential orders.

Market Forecast:

Overall, while the purchase price of seed cotton had slightly increased, boosting market sentiment, the pace of new cotton harvesting in Xinjiang had accelerated, and the pace of new cotton harvest and delivery was faster than last year. This will gradually relieve supply pressure. Furthermore, with the September and October demand season drawing to a close, downstream demand was showing signs of slight weakness, limiting the ability to supply new cotton. Cotton prices are expected to remain range-bound in the short term. Continue to monitor the impact of future tariff negotiations and the gradual resolution of uncertainties such as production.

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