Cotton Prices Slip Amid Policy Uncertainty, Global Demand Remains Mixed
Cotton prices weakened over the past month, with the December NY/ICE contract dipping below 66 cents per pound and briefly touching new contract lows under 65 cents before recovering slightly. The A Index eased from 78 to 76 cents per pound. International benchmarks also softened, with China’s CC Index 3128B falling from 98 to 94 cents per pound (15,250 to 14,750 RMB/ton). Indian Shankar-6 cotton remained steady near 78 cents/lb, while Pakistani spot prices held around 68 cents/lb.
Global cotton supply, demand, and trade reporting has been disrupted by the U.S. government shutdown on October 1, delaying official estimates. Harvesting is underway in major northern hemisphere producing countries. In China, recent rains raised minor quality concerns, though production forecasts have been revised upward. India’s heavy monsoon affected yields and quality, prompting the Cotton Corporation of India (CCI) to prepare for increased domestic purchases. Pakistan has faced flooding and excessive rainfall, while U.S. harvesting continues under generally dry conditions.
The market faces uncertainty due to upcoming U.S. Supreme Court hearings on the legality of tariff increases implemented this year, particularly regarding the International Emergency Economic Powers Act (IEEPA). A ruling could take months and may result in refunds or alternative justifications, leaving U.S. retailers and brands cautious in order allocation.
Global economic conditions add further pressure. The OECD projects global GDP growth at 3.2% in 2025, slowing to 2.9% in 2026. U.S. growth is forecast at 1.8% in 2025 and 1.5% in 2026, Euro Area growth remains sluggish, and China’s economy is expected to decelerate to 4.4%. Slower growth in major consumer markets may weigh on cotton demand, although inventory stabilization in the U.S. could provide support.
Cotton market analysts say the combination of policy uncertainty, weather impacts, and global economic trends will continue to shape price movements and trade activity for the remainder of the crop year.
