Several star commodities emerged in 2025, but what new trends will dominate in the coming year? Today, we highlight two commodities: cotton and apples.

First, cotton is driven by two key factors. One is the significant reduction in cotton planting area in Xinjiang. The regulated target for Xinjiang's cotton planting area in 2026 is approximately 36 million mu, a decrease of 5 to 7 million mu compared to 2025. To put this in perspective, Xinjiang's cotton area in 2025 was about 41 to 43 million mu, so a reduction of 5 million mu represents a decline of over 10%. Nationally, the total cotton area in 2025 was around 45 million mu, making a drop of 5 to 7 million mu quite substantial. A smaller planting area directly translates to lower output. If weather conditions also become unfavorable, further affecting the area or yield per unit, it is highly possible that China's cotton production could decrease by more than 15% this year.

The second driver is the expectation of global cotton production reduction due to planting losses. Taking U.S. cotton as an example, after deducting direct and indirect costs, growers have been operating at a loss in recent years, and these losses are increasing. Continuous losses diminish farmers' enthusiasm, regardless of their attachment to the land. The USDA Agricultural Outlook Forum in February projected that global cotton production for the 2026/27 season would decrease by 3.9 million bales, a 3.2% reduction, with the top three producing countries—China, the United States, and Brazil—all experiencing declines to varying degrees. With a slight upward adjustment in demand, ending stocks are expected to fall by 5.2%. Domestically, China relies on imports to meet an annual demand gap of about 2 million metric tons, or approximately 30%. Significant fluctuations in international markets can therefore impact domestic cotton prices. For instance, the sharp rise in domestic cotton prices after the Spring Festival holiday was influenced by movements in overseas markets.

Next is the apple market, which is also influenced by two drivers. One is the current low inventory, meaning supplies are tight. A tight supply-demand balance is expected to be the main theme until the new apple harvest in October. In this context, downward pressure is limited, while even minor disruptions can easily trigger upward price movements. The other driver is the constrained growth in planting area due to policies regulating the conversion of farmland away from grain production. Since 2021, China's apple planting area has declined sharply, with major producing regions like Shaanxi, Shandong, and Henan showing a downward trend. If extreme weather occurs during the growing season, the resulting production decline could lead to notable market trends. Examples include the significant reduction in apple output due to widespread frost in 2018 and market volatility in 2022 caused by tree removal in producing areas and high temperatures during the flowering period.

From a technical perspective, the underlying logic for these two commodities is already in play, and once a trend is established, it is unlikely to reverse quickly. Previous analyses have covered these commodities, such as discussions on apples and internal exchanges at key price levels. Further insights on other noteworthy commodities will be shared in the future, and reader engagement is welcomed.