The short-term momentum in domestic and international cotton futures has weakened, suggesting a neutral outlook. It is advisable to reduce long positions during price peaks and await opportunities to buy on dips. On April 23, the China Cotton Association issued an industry warning, indicating that relevant authorities will implement comprehensive regulatory measures to promote stable market operations and healthy industrial development. ICE cotton futures have also raised initial and maintenance margin requirements, effective from April 22.
Spot cotton prices have shown a stable to increasing trend. Traders are predominantly offering basis quotes for September delivery; although the basis level has declined, absolute prices continue to rise. Currently, cotton traders are actively purchasing, while textile mills are more cautious in their procurement. Despite raised expectations, futures performance still exceeds projections.
Imported cotton yarn USD offers have increased, and port inventories in China have slightly decreased. In March, China imported 212,000 tonnes of cotton yarn.
The 894,000-tonne tariff-rate quota for 2026 was issued at the beginning of the year. An additional 300,000-tonne processing trade import quota was issued in March, requiring contract applications. Cotton arrivals in China reached 175,800 tonnes in March.
Yarn mill operating rates have rebounded, and weaving mill operating rates remain high. Inventory levels across the industrial chain have decreased, with both raw material and finished product stocks declining.
Major cotton-producing regions show a neutral to slightly positive outlook. In Xinjiang, planting progress for the 2026/27 new crop exceeds 90%, faster than the same period last year. Market focus is on the implementation of the new target price subsidy policy and the state reserve rotation policy. In the US, the CFTC non-commercial net long ratio increased from 17.7% to 21.2%, while export signings slowed sequentially. New crop planting progress has reached 11%, with increased precipitation in the Southwest and Mid-South regions, though the Southeast remains relatively dry. Indian cotton prices have risen again, with daily new crop arrivals dropping to around 8,000 tonnes. Crown Castle has continued to raise its auction reserve price and plans to clear its inventory in batches by the end of July. A Brazilian agency slightly raised its 2026/27 production forecast from 3.795 million tonnes to 3.843 million tonnes. Pakistani cotton prices continue to rise amid tight domestic supply.
Terminal consumption presents a neutral to slightly negative picture. US apparel retail and wholesale sales continued to grow in February, and the wholesale inventory-to-sales ratio declined, but consumer confidence decreased. In March, exports from major textile and apparel exporting countries generally performed poorly, with only Vietnam maintaining relative stability.
On the macro level, the outlook is neutral. On March 15-16, 2026, Chinese and US trade chiefs held the sixth round of economic and trade consultations in Paris, France. On March 16, 2026, the US announced a postponement of the President's planned late March to April visit to China by five to six weeks to mid-May, citing the need for the President to manage Middle East conflicts from the White House. On April 22, 2026, the US Trade Representative stated that the US aims to reach an agreement during the President's upcoming visit for China to purchase more agricultural products beyond soybeans.
On March 18, 2026, the Federal Reserve's FOMC meeting announced no interest rate cut.
On April 8, the US and Israel announced acceptance of a Pakistani proposal for a two-week ceasefire (expiring April 22), with Iran agreeing to open the Strait of Hormuz. As of the weekend of April 11-12, the US and Iran had not yet fully reached an agreement. The US maintained pressure by blocking ships bound for Iranian ports in the Strait of Hormuz. On April 21, the US President announced on social media, responding to mediator Pakistan's request, an extension of the ceasefire with Iran until Iran submits a proposal and negotiations conclude, while continuing the maritime blockade and maintaining a state of readiness.
The China Cotton Association has issued an industry warning, stating that comprehensive regulatory measures will be taken to promote stable market operation.
Major textile exporting countries reported poor export performance in March. The USDA's April report was slightly bearish overall, with an underestimation of Chinese consumption. The USDA raised its estimates for Chinese production by 65,000 tonnes and consumption by 109,000 tonnes in its April report, but these estimates still fall short of the current consumption reality in China, with further upward revisions expected in the May report.
Declining expectations for Federal Reserve interest rate cuts may impact consumption forecasts.
US apparel sales showed retail and wholesale growth, but consumer confidence declined. US imports of cotton textile and apparel products in February decreased by 12.4% year-on-year and 7.8% month-on-month. In February 2026, the US imported 1.23 billion square meter equivalents of cotton textiles and apparel, down 12.4% year-on-year and 7.8% month-on-month. Cumulative imports for January-February 2026 were 2.56 billion SME, down 13.5% year-on-year. Imports from China in February were 220 million SME, down 27.5% year-on-year and 5.4% month-on-month; cumulative imports from China for January-February were 460 million SME, down 34.6% year-on-year. Imports from India were 180 million SME, down 30.6% year-on-year and 14.6% month-on-month; cumulative imports from India were 390 million SME, down 26.5% year-on-year. Imports from Pakistan were 200 million SME, down 3.4% year-on-year and 1.3% month-on-month; cumulative imports from Pakistan were 410 million SME, down 4.5% year-on-year. Imports from Vietnam were 170 million SME, up 17.1% year-on-year but down 3.1% month-on-month; cumulative imports from Vietnam were 340 million SME, up 12.4% year-on-year. Imports from Bangladesh were 120 million SME, down 19.6% year-on-year and 29.7% month-on-month; cumulative imports from Bangladesh were 290 million SME, down 8.0% year-on-year.
Exports from major textile exporters generally declined in March, with Vietnam performing relatively well. Bangladesh's apparel exports in March 2026 were $2.78 billion, down 19.4% year-on-year and 1.2% month-on-month; cumulative exports for January-March were $9.21 billion, down 11.1%. Vietnam's textile and apparel exports in March were $3.16 billion, up 3.1% year-on-year and 30.1% month-on-month; cumulative exports for January-March were $8.83 billion, up 1.6%. India's apparel exports in March were $1.24 billion, down 19.1% year-on-year and 11.6% month-on-month; cumulative exports for January-March were $4.19 billion, down 10.3%. Pakistan's textile and apparel exports in March were $1.33 billion, down 7.1% year-on-year but up 1.4% month-on-month; cumulative exports for January-March were $4.38 billion, down 3.3%. China's textile and apparel exports in March were $16.63 billion, down 28.9% year-on-year and 25.9% month-on-month; cumulative exports for January-March were $67.08 billion, up 1.2%.
In China, cotton prices are rising rapidly, prompting an association warning. The USDA has raised its estimates for Chinese production, imports, and ending stocks. Domestic Chinese institutions have again raised cotton consumption estimates and lowered ending stock projections.
Surveys indicate varying intentions for new cotton planting. Planting progress has reached 90.9%, 4.6 percentage points faster than the same period last year, with a seedling emergence rate of 38.4%. Commercial and industrial inventories stood at 4.952 million tonnes by mid-April, a decrease of 91,500 tonnes year-on-year. Inspected Xinjiang cotton reached 7.5157 million tonnes, with weekly Xinjiang warehouse business cotton decreasing by 123,900 tonnes. Outbound trucking freight costs from Southern Xinjiang decreased slightly, while costs from Northern Xinjiang increased slightly.
Weather patterns show higher temperatures in the northwest and lower temperatures in the southeast, with precipitation concentrated in the south. Zhengzhou cotton futures warehouse receipts have decreased, while effective预报量 increased slightly. The total of warehouse receipts and effective预报量 is approximately 542,000 tonnes, with about 417,000 tonnes in inland warehouses.
The price difference between domestic and international spot cotton continues to narrow, while the ICE cotton July/December spread continues to strengthen.
Cotton imports in March reached 175,800 tonnes, up 137% year-on-year. Cumulative imports for the 2025/26 marketing year (Sept 2025-Mar 2026) reached 1.029 million tonnes, up 27.6% year-on-year. Cumulative imports for January-March 2026 were 548,000 tonnes, up 61.7% year-on-year.
Cotton yarn imports in March were 212,000 tonnes, up 66% year-on-year. Cumulative imports for the 2025/26 marketing year reached 1.094 million tonnes, up 28.8% year-on-year. Cumulative imports for January-March 2026 were 506,000 tonnes, up 49.8% year-on-year.
Domestic cotton yarn prices have risen, while Indian cotton yarn offers have seen slight increases. Weaving mill operating rates remain high, and port inventories for imported yarn have decreased. Spinning mill operating rates have slightly rebounded, and industrial chain inventories continue to decline. Xinjiang cottonseed prices increased slightly, while inland cottonseed prices fluctuated. Viscose staple fiber prices rose, polyester staple fiber prices were volatile, and the cotton/polyester price spread strengthened slightly.
China's textile and apparel exports in March decreased year-on-year, but showed growth of about 1.2% for the first three months. Apparel exports in March declined, with significant decreases to Europe, the US, and the Middle East. Low-value small parcel exports for January-March overall decreased by 8%, though exports to Singapore maintained growth. Domestic sales of textiles and apparel continued strong growth in the first three months of 2026.
In the US, export signings decreased, and non-commercial positions continued to reduce net shorts. The USDA made no adjustments to the US cotton balance sheet. The US cotton-to-grain price ratio continues to improve. US cotton export signings progress is at 93.6%, with shipments at 60.5%; both figures declined sequentially. US new crop planting progress is 11%, with Texas at 16%. ICE warehouse receipts increased significantly, and the non-commercial net long ratio continued to increase. Non-commercial short positions in ICE cotton futures continued to be reduced. Drought conditions in Texas have somewhat alleviated, while Georgia's drought remains severe. Late April forecasts indicate higher temperatures in the Southeast and increased precipitation in the Mid-South region. Precipitation in Texas increased slightly, while Georgia's precipitation remains below average.
In India, cotton prices are rising, and Crown Castle's auction reserve price continues to be raised. The USDA raised its import expectation for Indian cotton. The Cotton Association of India raised its production forecast. India imported 17,000 tonnes of cotton in February 2026, down 65.2% year-on-year. India announced an extension of the duty-free import window for cotton, originally from August 19 to September 30, 2025, until December 31, 2025. Estimated duty-free imports from August 19 to end-December 2025 are nearly 700,000 tonnes. The duty exemption includes Basic Customs Duty and Agriculture Infrastructure Development Cess, reducing import costs by approximately 11%. Current import duties include a 5% BCD, a 5% AIDC, and a 10% Social Welfare Surcharge on the sum of BCD and AIDC. In January 2026, India imported 75,000 tonnes of cotton, up 27.5% year-on-year but down 70.9% month-on-month. Cumulative imports for the 2025/26 marketing year (Oct 2025-Jan 2026) were 630,000 tonnes, up 124% year-on-year.
Domestic Indian cotton prices have increased. By late April, the ex-mill price for S-6 reached 61,000 rupees per candy (approximately 82.68 cents/lb), up about 1,300 rupees per candy from the previous week. Indian cotton yarn offers saw slight increases, with 32-count yarn offers stable around $2.88 per kilogram, up $0.03 per kg from the previous week. Crown Castle raised its auction reserve price again. After an increase on April 16, further adjustments were made on April 20, 21, and 22, bringing the reserve price to 62,100 rupees per candy. Crown Castle conducts two daily electronic auctions, with the first session reserved for textile mills to prioritize meeting spinning demand. As of around April, Crown Castle had sold approximately 770,000 tonnes of current-year reserve resources, with the remainder expected to be cleared in batches by the end of July. Daily new crop arrivals in India are around 8,000 tonnes, mainly from Maharashtra, Gujarat, and Karnataka. US-India trade negotiations resumed on April 20 in Washington, D.C., marking the first face-to-face talks since October 2025, aiming to finalize the first phase of a proposed bilateral trade agreement.
Spinning operating rates are stable in Vietnam and have increased slightly in India and Pakistan. India exported 17,000 tonnes of cotton and 103,000 tonnes of cotton yarn in February 2026. India's apparel exports in March 2026 were $1.24 billion, down 19.1% year-on-year and 11.6% month-on-month; cumulative exports for January-March were $4.19 billion, down 10.3%.
The USDA's expectations for Pakistan's cotton balance sheet remain unchanged. Pakistan's new crop arrivals reached 869,000 tonnes by February 28, 2026, up 1.5% year-on-year, with 866,000 tonnes processed. Of this, 804,000 tonnes were sold to textile mills, 28,000 tonnes were exported, ginneries held 35,000 tonnes of unsold processed stock, and 3,000 tonnes of unprocessed stock. By region, Punjab cumulative arrivals were 417,000 tonnes, down 1% year-on-year, while Sindh arrivals were 452,000 tonnes, up 3.8% year-on-year. Pakistan's textile and apparel exports in March 2026 were $1.33 billion, down 7.1% year-on-year.
The USDA's expectations for Vietnam's cotton balance sheet are unchanged. Vietnam's textile and apparel exports in March increased 3.1% year-on-year, and it imported 159,000 tonnes of cotton.
The USDA's expectations for Bangladesh's cotton balance sheet are unchanged. Bangladesh's apparel exports in March 2026 were $2.78 billion, down 19.4% year-on-year and 1.2% month-on-month; cumulative exports for January-March were $9.21 billion, down 11.1%. Bangladesh imported 131,000 tonnes of cotton in March 2026, down 10.6% year-on-year but up 9.4% month-on-month; cumulative imports for the 2025/26 marketing year (Aug 2025-Mar 2026) were 1.006 million tonnes, down 8.7% year-on-year.
The USDA's expectations for Turkey's cotton balance sheet are unchanged. Turkey's cumulative imports for the current marketing year reached 473,000 tonnes, up 19% year-on-year.
In Brazil, a domestic agency slightly raised its new crop production forecast. The USDA made no adjustments to the Brazilian cotton balance sheet. Brazil's CONAB slightly raised its 2026/27 production forecast.
Comments