Global Supply and Demand Structure Shifting Toward Tight Balance; Cotton Prices Still Have Room to Rise

Chaotic Tiancheng Futures Research Report shows that on the supply side, domestically, Xinjiang’s area control during the 26/27 harvest season is strong. Although there are rumors of increased quotas, the scale is small and will not affect the domestic supply and demand pattern this year. Internationally, the potential high fallow rate risk in the U.S. combined with Brazil’s expected production reduction clearly indicates a new season supply contraction outlook, providing significant potential bullish support. On the demand side, nationwide downstream operating rates continue to recover, with strong demand in the yarn and fabric sectors, while grey fabric demand is moderate. Attention should be paid to subsequent replenishment during the “Golden March and Silver April” period. Due to quota rumors, the market surged then retreated, but overall, the 26/27 season shows a clear trend of supply and demand shifting toward tight balance, with a supply-demand gap possibly exceeding 500,000 tons. Cotton prices still have upward potential. It is recommended to buy on dips after stabilization. Going forward, focus should be on domestic and international new season planting conditions and downstream demand transmission.