SDA Projects Lower Global Cotton Stocks As U.S. Crop Slips To Near-Decade Low

Global cotton stocks are expected to decline in the 2025/26 season, as the latest U.S. Department of Agriculture (USDA) outlook projects weaker production worldwide, led by cuts in the United States, China, India, and Australia. The August Cotton and Wool Outlook report forecasts global ending stocks at 73.9 million bales, down 1.1 million bales (1.5%) from last year, setting the stage for slightly higher prices.

World cotton production in 2025/26 is projected at 116.6 million bales, a 2% drop from 2024/25, though still the second-highest since 2019/20. The decline comes even as global mill use is forecast steady at 118 million bales, keeping demand above production. Brazil stands out as the only major grower expanding output, with a record 18.25 million bales, thanks to larger acreage. By contrast, Australia is set for a 27% production fall to 4.1 million bales, while China and India are each forecast to produce 500,000 bales less than last season.

Global trade is expected to rise modestly to 43.6 million bales, driven by Brazil’s projected record exports of 14.3 million bales, nearly one-third of world shipments. The U.S. and Brazil are expected to jointly supply 60% of global exports, with Bangladesh and Vietnam remaining the top importers.

The U.S. cotton crop is projected at 13.2 million bales, down 8% from last year and the second-lowest since 2015/16. Planted area fell sharply to 9.3 million acres, 17% lower than 2024/25, as weaker price prospects and weather disruptions cut sowings. While abandonment rates improved to 21% from last year’s 30%, harvested acreage remains historically low at 7.4 million acres.

Regionally, the Southwest is a bright spot, with output expected at 5.7 million bales, 27% above last year. But the Delta is forecast down 24% to 3.8 million bales, the lowest since 2021/22, and the Southeast is projected at 3.1 million bales, a 10-year low in area. Extra-long staple (ELS) production is also set to contract by 23%.

U.S. exports are forecast at 12 million bales in 2025/26, slightly higher than last year but 500,000 bales below July’s estimate due to smaller supply and stronger competition from Brazil. Domestic mill use remains flat at 1.7 million bales, the lowest in over a century. As a result, U.S. ending stocks are projected at 3.6 million bales, down 10% year-on-year, with a tighter stocks-to-use ratio of 26%.

U.S. cotton product imports rose 5% in the first half of 2025 to the equivalent of 8.6 million bales, while exports fell 4%, widening the trade deficit to 7.5 million bales. China’s share of U.S. imports slipped to 21%, while India expanded its presence to 16%, and Bangladesh, Pakistan, and Vietnam each captured larger shares above 10%.

With consumption projected to outpace production, USDA expects firmer global cotton prices in 2025/26. The U.S. farm price for upland cotton is forecast at 64 cents per pound, marginally higher than last year’s 63 cents.

The report concludes that global cotton dynamics are shifting toward Brazil’s dominance in exports, U.S. supply constraints, and stable demand in Asia, underscoring continued volatility for mills and traders alike.