Cotton prices in China decline amid rising inventories and weak demand

Cotton prices in China declined in October 2026 despite lower domestic production and rising raw material costs for ginning mills. According to SunSirs, the average spot price of 3128B-grade cotton lint stood at 16,845 yuan/t as of October 29, down 3.24% from the beginning of the month. Meanwhile, January cotton futures on the Zhengzhou Commodity Exchange fell by 3.8% to 15,170 yuan/t.

The main pressure on the market came from a rapid accumulation of commercial inventories amid accelerated harvesting of the new crop. At the end of September, China’s commercial cotton stocks stood at 1.77 mln tons, rising to 2.61 mln tons by October 15. According to Mysteel, inventories reached 2.91 mln tons by October 23. The largest volumes accumulated in Xinjiang, China’s main cotton-producing region.

Despite lower cotton lint prices, seed cotton procurement prices remained above year-earlier levels. In Xinjiang, the average price of machine-harvested seed cotton stood at 7.33 yuan/kg during October 19–25, up 16.7% year-on-year. Meanwhile, 80.1% of China’s cotton crop had been harvested by October 22, with processing progressing faster than a year earlier. This accelerated the arrival of new supplies amid limited demand.

Weak activity in the textile industry has added further pressure. By late October, operating rates at spinning mills had fallen to 69%, while weaving mills were operating at just 35% capacity. Declining orders, lower yarn prices and growing losses prompted textile manufacturers to limit raw material purchases. As of October 15, industrial cotton inventories at textile enterprises totaled 831.9 thsd tons, reflecting cautious purchasing activity.

SunSirs analysts expect cotton futures prices in China to fluctuate within a range of 15,200–15,800 yuan/t in the near term. Despite lower production and elevated seed cotton procurement prices, substantial commercial inventories and weak demand from the textile sector are expected to limit any price recovery. A significant increase in prices would require a noticeable improvement in orders and a recovery in processing activity.

Tags: China, cotton