Driving factors analysis of Chinese cotton prices in 2004-2021


After entering WTO in 2000, the textile trade of China became more active. In 2000/01-2007/08 crop year, the demand for Chinese textiles from other countries in the world has exploded, and China’s cotton consumption also climbed up from 4.64 million tons to 10.6 million tons, with a growth rate of 128%, which triggered strong demand for pricing power on Chinese cotton. On June 1, 2004, cotton futures were launched on Zhengzhou Commodity Exchange. After experiencing the financial crisis in 2008, Chinese cotton prices once soared to above 30,000yuan/mt. In 2011-2013, the government reserved enormous quantity of cotton into state warehouses, and in 2014, the state cotton reserves policy changed to direct subsidy policy and warehouse receipts standard of ZCE cotton was revised continually. The relations between ZCE cotton futures and spot cotton and between Chinese cotton and international cotton were closer. ZCE cotton futures and spot cotton prices were more sensitive to supply and demand relations, macro aspect and policies. The trade war between China and the United States in 2018 and the COVID-19 pandemic in 2020 had led to large changes in supply and demand relations and macro environment for Chinese cotton market. ICE cotton futures market broke through 100cent/lb in end Sep, 2021, and hit a ten-year high, and Chinese cotton prices also hit a seven-year high of 20,000yuan/mt. Therefore, this research report shows the major driving forces of Chinese cotton prices from 2004 to Sep, 2021, and makes a brief analysis on the influencing factors on current cotton market.


I. Preface

II. Chinese cotton price trend interpretation in 2004-2021

1. Chinese cotton price operation in 2004-2015

2. Stable macro environment and gradual recovery of demand in 2016-2017

3. Sino-US trade war and volatile cotton prices in 2018-2019

4. Covid-19 pandemic in 2020

5. 2021: cotton prices hit multi-year high

III. Influencing factors on Chinese cotton prices

1. Consumption: U.S. additional tariffs on Chinese goods are still imposed, and consumption faces difficulties to keep up

2. Supply side: no large contradiction on volume, but structural contradiction exists in short

IV. Conclusion


Chart 1. Price trend of Chinese cotton 3128 and ZCE coton futures

Chart 2. ZCE and ICE cotton futures

Chart 3. Chinese cotton consumption trend

Chart 4. Global cotton production forecast by USDA

Chart 5. Numbers of ginning factories in China and the proportion

Chart 6. China reserved cotton sales and purchases


Figure 1. U.S.’s additional tariffs on Chinese goods

If you need the report, please contact us at: 

T 86-571-8378 6653, 8378 6504 
F 86-571-8378 6600 
Email: market@ccfgroup.com