Last week (May 25–June 1), domestic cotton prices exhibited a volatile yet generally firm trend. Currently, the growth of new cotton crops nationwide is generally favorable; however, cotton seedlings across Xinjiang are in the sixth true-leaf stage, with a budding rate of 24.8%—7.6 percentage points slower than during the same period last year. The downstream sector is currently in its traditional off-season for consumption; consequently, textile enterprises are largely limiting their restocking to meeting immediate, essential needs, maintaining a cautious pace in their procurement activities. According to data from the SunSirs Commodity Market Analysis System, as of June 1, the spot price for domestic Grade 3128B ginned cotton stood at 17,651 RMB/ton, representing an increase of 0.98% compared to the previous week.

Domestic Front

The target price policy for Xinjiang cotton for the 2026–2028 period has officially been implemented, providing a solid floor of support for cotton prices. Regarding weather conditions, the weather has improved and temperatures have risen across most parts of Northern Xinjiang, favoring cotton growth; however, certain areas in Southern and Eastern Xinjiang continue to experience strong winds and dust storms, necessitating continued monitoring of the potential impact of these weather fluctuations on cotton seedlings.

According to data from the National Cotton Market Monitoring System, as of May 28, the national cotton processing rate stood at 99.9%—unchanged year-on-year and on par with the average of the past four years. Meanwhile, the national sales rate reached 95.0%, representing a year-on-year increase of 9.2 percentage points and a substantial rise of 17.3 percentage points above the four-year average; this indicates a marked acceleration in the pace of cotton sales during the current season.

Regarding downstream market conditions, the textile sector is clearly exhibiting characteristics typical of a traditional "off-season," with order volumes remaining weak. As of May 28, the operating utilization rate among textile enterprises in key regions stood at 74.5%, a decline of 1.59 percentage points from the previous week. Nevertheless, positive signals emerging from China-U.S. economic and trade consultations, the implementation of a series of domestic policies aimed at stimulating domestic demand, and disruptions to cotton crop growth caused by adverse weather in major producing nations are all expected to provide temporary support for cotton prices.

International Market

Last week, international cotton prices generally exhibited a weak and volatile trend. The ICE benchmark contract has shifted to the December delivery; the average settlement price stood at 79.33 cents per pound, down 2.08 cents from the previous week. The average settlement price for forward-month contracts was 80.32 cents per pound, a decline of 2.14 cents compared to the prior week.

Regarding export sales data, for the period of May 15–21, U.S. net upland cotton sales for the 2025/26 marketing year totaled 34,800 tons—an increase of 17% from the previous week and 32% above the four-week average. Shipments amounted to 72,100 tons, up 10% from the previous week but down 2% from the four-week average.

Market Outlook

Currently, the overall growth of cotton in Xinjiang is favorable; however, supported jointly by expectations of reduced yields in the medium-to-long term and low inventory levels, there remains room for cotton prices to trend upward. Going forward, key factors to monitor include: whether state reserve release policies are implemented, weather conditions in Xinjiang's primary production zones, and the pace of recovery in downstream demand.

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