China’s cotton market faces growing supply pressure despite lower production forecasts, as commercial inventories exceed 2.9 million tonnes and weak spinning and weaving activity limits raw-material purchases.
China’s cotton prices declined sharply in October 2026 as rising inventories, accelerated harvesting and weak textile demand outweighed concerns over reduced domestic production.
According to commodity market analyst SunSirs, the average spot price of 3128B-grade cotton fell 3.24% to ¥16,845 per tonne by October 29, while January cotton futures on the Zhengzhou Commodity Exchange declined 3.8% to ¥15,170 per tonne.
Commercial Inventories Jump 64%
China’s commercial cotton inventories increased from 1.77 million tonnes at the end of September to 2.91 million tonnes by October 23, according to market data cited by SunSirs and Mysteel.
Much of the accumulation occurred in Xinjiang, China’s principal cotton-producing region, as the new harvest entered the market.
By October 22, approximately 80.1% of the national cotton crop had been harvested, while only 4.3% had been sold, according to China’s cotton market monitoring system.
Spinning and Weaving Demand Remains Weak
The supply increase coincided with deteriorating textile manufacturing activity.
By late October, spinning mill operating rates had fallen to 69%, while weaving mill operating rates stood at just 35%.
Textile enterprises held approximately 831,900 tonnes of industrial cotton inventories on October 15, reflecting cautious procurement amid weak orders and declining yarn prices.
Meanwhile, Xinjiang’s machine-harvested seed cotton averaged ¥7.33 per kilogram during October 19–25, up 16.7% year on year, squeezing ginning margins.
Lower Production Fails to Support Prices
China’s October supply-demand projections put 2026–27 cotton production at 7.42 million tonnes, compared with 7.78 million tonnes in the preceding season.
Nevertheless, weak consumption and substantial inventories continue to limit price recovery.
SunSirs expects near-term cotton futures to fluctuate between ¥15,200 and ¥15,800 per tonne.
For international cotton exporters and Asian spinning mills, China’s subdued demand could restrain regional cotton and yarn prices.
The next market signals are November inventory levels, textile mill operating rates and new orders, which will determine whether lower cotton prices stimulate purchasing or remain under pressure.
