In recent days, the cotton market in Dezhou, Shandong province has seen a sharp upward trend in seed cotton, lint, and yarn prices. Local traders are caught between excitement and concern, unsure of how long this momentum will last.
On November 5th, the purchase price for local weak third-class seed cotton reached 6.80 RMB/kg (39% ginning, 13% regain), while Tonghua grade was priced at 6.60 RMB/kg (37% ginning, 14% regain). Five-grade cotton was at 6.40 RMB/kg. Compared to a week ago, prices have risen by 0.40 RMB/kg, and compared to early September, they’ve jumped by 2.40 RMB/kg. Year-on-year, the increase stands at 3.05 RMB/kg. Meanwhile, the price of cottonseeds remains stable at 2.10 RMB/kg.
With most of the local seed cotton picking season now over, farmers are holding back from selling, leading to low purchasing volumes. Some companies report daily purchases of more than 10,000 pounds, while others struggle to acquire even that amount. Some firms have gone several days without receiving any cotton.
The local lint cotton price has surpassed 29,000 RMB/ton, with the fourth-grade mainstream price at 28,700 RMB/ton and fifth-grade at 28,000 RMB/ton—both up by 2,000 RMB/ton compared to a week ago. As prices continue to climb, many cotton companies find themselves with large stockpiles. According to recent surveys, most companies have only sold about 40% of their inventory, putting significant financial pressure on them. Many are struggling with liquidity issues.
Cotton yarn prices have also surged. The mainstream price for locally available C32s pure cotton yarn has hit 37,000 RMB/ton, up by 3,500 RMB/ton from just a week earlier. This continued upward movement has left many industry players uncertain about the future but hopeful that the current trend may persist for some time.
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