In April 2026, the global cotton market's supply-demand balance tilted further. Data from the International Cotton Advisory Committee (ICAC) painted a clear picture: global cotton production for 2025/26 contracted year-on-year, while consumption steadily rose. This divergence directly triggered a linked increase in domestic and international cotton prices, rapidly transmitting to the midstream of the industrial chain. Polyester staple fiber prices also rose, sharply compressing textile mills' immediate profit margins.
Supply-Side Tightening: The Dual Play of Weather and Expectations
The supply tightening was not sudden. Since early 2026, adverse weather in several major producing countries has festered, exacerbating market concerns about next season's cotton supply. The latest ICAC data translates these concerns into quantitative judgments: global output is decreasing year-on-year, while consumption is increasing, implying further destocking of ending inventories. This tight supply-demand pattern has become the core logic behind rising cotton prices.
Market sentiment has also heated up. Bullish expectations have driven speculative capital inflows, further amplifying price volatility. For Chinese textile enterprises, this means significantly increased uncertainty in raw material procurement costs. Although the Xinjiang cotton region was not specifically mentioned in this monthly report, its status as the main domestic supply source means any fluctuation in domestic cotton prices directly impacts downstream yarn and fabric sectors.
Cost Transmission: A Chain Reaction from Cotton Prices to Profits
The shockwave of rising cotton prices first hit the substitute chemical fiber market. Polyester staple fiber prices rose in tandem, reflecting increased demand from textile mills seeking alternative raw materials amid tight cotton supply, which in turn pushed up their prices. This phenomenon underscores an industry-wide behavior of actively adjusting raw material ratios to hedge against cost pressures.
However, substitution is not a panacea. With both cotton and polyester staple fiber prices rising, textile mills face a comprehensive increase in production costs. Industry public data shows that textile processing immediate profits continued to decline in April, with some small and medium enterprises already breaching their breakeven points. Cost pressures are accelerating downstream—fabric merchants, garment manufacturers, and even brands will face a new round of price adjustments.
For buyers, this means the traditional quarterly pricing model may become obsolete. The high volatility of cotton prices requires shorter pricing cycles, and as suppliers' profit margins shrink, delivery stability and quality control will also be tested.
Industrial Belt Reactions: Inventory and Order Games in Keqiao and Shengze
As core nodes of the textile industry, the movements in Keqiao (Shaoxing) and Shengze (Wujiang) are worth watching. In April, Keqiao's fabric market saw a clear increase in inquiries but cautious transactions, with buyers favoring small-batch, multi-frequency orders to avoid inventory devaluation risks from raw material price fluctuations.
Weaving enterprises in Shengze face a more direct dilemma. Some have chosen to increase inventory hoarding at high cotton prices, betting on further price increases; while more have opted for just-in-time procurement, maintaining low inventory levels. This divergence in strategies reflects the industry's inconsistent outlook on the future. Regardless of the choice, capital occupation costs are rising.
The home textile sector is also feeling the pressure. The Nantong home textile cluster, with its higher raw material cost ratio, sees a more significant impact of cotton price increases on final product pricing. Some brands have begun to contemplate price hikes, but with consumer-side recovery still fragile, whether these hikes will be accepted by the market remains uncertain.
Foreign Trade Enterprises: The Double Risk of Exchange Rates and Cotton Prices
For export-oriented textile enterprises, the April market environment was more complex. Fluctuating RMB exchange rates combined with rising cotton prices made export pricing tricky. If companies cannot fully pass on costs to overseas buyers, profit margins will narrow further.
Moreover, the magnitude of international cotton price increases does not always align with domestic ones. Changes in the domestic-international price spread affect the competitiveness of imported cotton. Spinning mills relying on foreign cotton may face a weakened raw material cost advantage, prompting adjustments in procurement sources.