Rising Stocks and Weak Demand Pressure China’s Cotton Market
Decline in Spot and Futures Prices; Market Outlook Remains Soft
China’s cotton market faced downward pressure throughout October 2026. The arrival of the new harvest and low operating rates at textile mills weighed on prices. Despite high costs for seed cotton, cotton lint failed to gain sufficient price support.
Prices initially rose at the start of the harvest, but increased availability—driven by accelerated harvesting and ginning activities in Xinjiang—pushed prices lower. Spinning and weaving mills are currently operating below capacity, which has limited consumption and squeezed margins for ginners.
Spot and Futures Prices
As of October 29, the spot price for 3128B-grade cotton lint in China stood at approximately 16,845 yuan per tonne—a 3.2% decline since the beginning of the month. On the Zhengzhou Commodity Exchange, January cotton futures fell by 3.8% in October, settling at 15,170 yuan per tonne. The overall market sentiment remains soft.
Rising Stocks and Supply
China’s cotton inventory stood at 1.77 million tonnes at the end of September, rising to 2.61 million tonnes by October 15 and 2.91 million tonnes by October 23. By October 22, 80.1% of the national crop had been harvested, with reports indicating that over 90% of the harvest in Xinjiang is complete—a process facilitated by favorable weather conditions.
Weak Textile Demand
In Xinjiang, the average price for machine-picked seed cotton between October 19 and 25 was 7.33 yuan per kilogram, an increase of 16.7% year-on-year. However, the soft prices for cotton lint have negatively impacted the profitability of ginners. By the end of October, spinning mills were operating at 69% capacity, while weaving mills were at 35%. In mid-October, textile companies held an industrial cotton stock of approximately 831,900 tonnes. Weak yarn orders and limited buying activity continue to exert pressure.
Market Outlook
In the near term, Zhengzhou cotton futures are likely to face mild downward pressure. However, the high cost of seed cotton may limit any decline. A sustained recovery will require an increase in yarn orders and mill operating rates, alongside a reduction in inventory levels. An improvement in demand is essential
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