【Wdoodoo Weekly Pulp Report】Planting speculation persists; domestic and overseas cotton rally and fluctuate

ZCE cotton rallied and fluctuated last week. The closing price of CF09 stood at RMB 16,195/ton, up RMB 260/ton week-on-week. The spot price of Cotton 3128B settled at RMB 17,280/ton, rising by RMB 330/ton from the previous period. Bullish planting factors remain unconfirmed in the short term, and production reduction speculation for the April planting season has entered a heated stage. Nevertheless, actual sowing conditions in China and the US need to be verified in May. If the outcome falls short of market expectations, a phased pullback in prices should be guarded against.

1. Middle East tensions linger; market grows desensitized to relevant impacts

2. US drought and Xinjiang planting cuts become core market focuses; caution over May verification

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Domestically, the intended cotton planting area in Xinjiang reached 39.516 million mu in March, a year-on-year decline of 3.4%, while market expectations point to a total cut of around 5%. The current sowing progress in Xinjiang has exceeded 60%. May will serve as a key verification window, with the market awaiting the release of the 2026–2029 Xinjiang cotton target price subsidy policy and actual new-season planting data.

3. Demand support remains intact, yet downstream hidden risks persist

Global restocking demand is recovering. In the first three months of this year, China’s cumulative imports of cotton and cotton yarn both exceeded 500,000 tons, surging by over 50% year-on-year. Retail sales of textile products including garments, shoes and hats increased by 7% year-on-year in March. From January to March 2026, the total export volume of textiles and apparel reached 67.08 billion US dollars, up 1.2% year-on-year.

The overall operating rate of textile mills remained stable. Inventories of pure cotton yarn and grey fabric dropped both month-on-month and year-on-year, staying at a historical seasonal low. High production capacity keeps cotton consumption at a robust level, maintaining a tight supply-demand balance and offering solid support to cotton prices.

However, amid concerns over seasonal demand weakening, downstream manufacturers show limited acceptance of high cotton prices. Cotton procurement by textile enterprises stayed sluggish last week, with only rigid demand transactions based on basis pricing. On Thursday, the China Cotton Association issued an industry alert, reminding enterprises to assess market conditions rationally.

Overall OutlookIn the short run, cotton prices will maintain a bullish and volatile pattern. US drought risks during the sowing season and policy-driven planting reduction in Xinjiang are the core drivers for domestic and overseas cotton speculation. Entering the May planting verification period, it is critical to track the actual scale of planting area reduction, as well as potential policy adjustments such as state reserve sales following the sharp short-term price surge.