Cotton Market Review: Prices Continue to Decline Amidst Weak Demand and Global Pressures
The bearish trend in the cotton market persisted last week, as support from the demand side appeared to be consistently waning. The impact of the current off-season is clearly evident within the industry, resulting in relatively weak new orders from the downstream textile sector. Concurrently, pressure was also observed in the futures market, with the Zhengzhou cotton futures contract slipping below the critical psychological threshold of 16,000 RMB/ton.
In the domestic market, the spot price for Grade 3128B lint cotton stood at approximately 17,480 RMB/ton as of May 25—marking a decline of about 1.31% compared to the previous week. Although the cotton sales rate remains robust and national-level processing is nearing completion, this underlying strength has proven insufficient to prop up prices. While the pace of sales is indeed brisk at present, it is primarily driven by the liquidation of existing stocks rather than by fresh demand.
An uptick has also been recorded on the import front. In April 2026, cotton imports surged on a year-on-year basis, while the cumulative imports for the January-to-April period also witnessed a significant increase. This has further intensified domestic supply pressures, thereby exerting additional downward pressure on prices.
The situation within the downstream textile sector remains mixed. While large-scale enterprises have managed to maintain a certain degree of stability in their order books, small and medium-sized enterprises (SMEs) are grappling with a dearth of demand and mounting inventory pressures. The accumulation of finished goods inventory has weakened the production-to-sales ratio, consequently curtailing fresh procurement activity.
Pressure on cotton prices was also evident on the international stage. Following initial volatility, ICE cotton futures experienced a sharp decline—a movement influenced by broader weakness across global commodity markets and prevailing economic uncertainties.
Looking ahead, cotton prices are likely to remain volatile. In the absence of a clear recovery in demand and policy support, the downward trend in the market may persist.
read more:- China Extends Cotton Support Policy Through 2028
