The spot price of cotton from Xinjiang has fallen by more than 20 per cent since Washington effectively banned imports from the region in June

Supply side disruptions caused by extreme weather in countries like the US and recession fears are also weighing on the global cotton market

As the cotton harvest gets under way in Xinjiang, scenes of frenzied buying at mills that were a feature of last year are nowhere to be seen.

The spot price of cotton from the autonomous region has fallen by almost a quarter since Washington effectively banned imports of Xinjiang goods over alleged forced labour in June.

But the sluggish market is not just limited to China’s far western region, which is home to one fifth of global cotton output. The industry worldwide is facing pressure from a number of quarters.

The Uygur Forced Labour Prevention Act and extreme weather in major planting areas have caused supply side disruptions. Weakening demand amid record high US inflation and global recession fears due to aggressive rate hikes are also weighing heavily on the cotton market, according to industry insiders and analysts.

“Ultimately we need to look at the demand, if the demand is bad, the price will not go up,” said the owner of a cotton-ginning mill in southern Xinjiang, who spoke on condition of anonymity.

The price of cotton futures trading on the Intercontinental Exchange – an American company that operates financial exchanges and clearing houses – has fallen nearly 30 per cent since late...

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