Global Cotton Outlook Weakens, 2025-26 Supply and Demand Structure Adjusted

According to the latest supply and demand outlook report released by the U.S. Department of Agriculture (USDA), the global cotton market is facing challenges of contracting demand in the 2025-26 season, with downward revisions to production, consumption, and exports. This change is expected to have a ripple effect on major cotton-producing and trading countries worldwide.

The report indicates that global cotton production for the 2025-26 season is projected to decrease by nearly 300,000 bales to 119.79 million bales (each bale approximately 217.7 kg). At the same time, global mill use (i.e., consumption) is also expected to decline to 118.61 million bales, reflecting weak demand in the textile industry.

It is worth noting that global ending stocks are projected to increase, with the stock-to-use ratio remaining at a high level of 64%. This ratio suggests that, despite the reduction in production, the contraction in demand is more pronounced, leading to persistent inventory pressure.

In the U.S. market, while cotton production is expected to see a slight increase, the report particularly highlights that "mill use has fallen to its lowest level in nearly 150 years." The term "mill use" here refers to cotton consumption by domestic mills or the textile industry. The weakness in this indicator reflects the continued contraction of the U.S. domestic textile manufacturing sector, extending a decades-long trend of industrial relocation.

Analysts interpret that the decline in global cotton demand is primarily influenced by multiple factors: slowing global economic growth suppressing textile consumption, the ongoing substitution effect of chemical fibers, and inventory adjustments in major consuming countries. Additionally, uncertainties in cultivation due to climate change, shifts in trade policies, and fluctuations in energy prices may further impact the direction of the cotton market.

This adjustment in the supply and demand structure is expected to exert pressure on international cotton prices while prompting major producing countries to adjust their planting strategies. Major cotton-producing countries such as India and Brazil may face intensified export competition, while textile-importing countries could benefit from relatively stable raw material costs.

The USDA report is often regarded as a bellwether for global agricultural markets, and its adjustments suggest that the cotton industry may enter a new adjustment cycle in 2025. Relevant countries and enterprises need to closely monitor subsequent data revisions and changes in actual planting intentions.