Global Cotton Stocks Hit Four-Year Low: USDA Report

The U.S. Department of Agriculture’s (USDA) September World Agricultural Supply and Demand Estimates (WASDE) report projects a more balanced yet tightening global cotton outlook for the 2025/26 season. While production and consumption are expected to rise, reduced opening stocks have pushed global inventories to their lowest level in four years.

U.S. Outlook: Production Marginally Higher, Demand Unchanged
For the United States, the 2025/26 cotton crop is forecast at 13.22 million bales, a modest 10,000-bale increase from last month. This revision reflects slightly higher planted and harvested acreage across most regions, even as the national average yield is trimmed by 1 pound to 861 pounds per harvested acre.

Despite the higher production, there are no changes to projected domestic use (1.7 million bales) or exports (12 million bales). Closing stocks are left steady at 3.6 million bales, keeping the stocks-to-use ratio at 26.4%. The season-average upland farm price remains pegged at 64 cents per pound, suggesting stable pricing expectations amid ample carryover supplies.

Global Outlook: Higher Production, Consumption, and Trade
On the world stage, 2025/26 cotton production is forecast at 119.2 million bales, more than 1 million bales above the August estimate. The gains are driven by increases in China (32.5m bales), India (24m bales), and Australia (18.25m bales), which offset declines in Turkey, Mexico, and several West African countries.

Global consumption is revised higher by nearly 850,000 bales to 119.2 million bales, largely due to stronger spinning demand in China (38.5m bales) and Vietnam, although consumption in Turkey is reduced.

World trade is projected at 43.7 million bales, up slightly from last month, reflecting stronger shipments from India and Australia, partly counterbalanced by weaker exports from West Africa.

Stocks Tighten: Lowest Carryout Since 2021/22
Global opening stocks for 2025/26 are lowered by nearly 1 million bales, mainly on account of stronger-than-expected 2024/25 consumption in China. With the upward revision in use, world closing stocks are reduced by almost 800,000 bales to 73.1 million bales, the tightest carryout since 2021/22. This pushes the world stock-to-use ratio to 45.1%, underscoring tighter supply availability relative to demand.

Regional Highlights from WASDE

• India: Production projected at 24m bales, with consumption steady at 25m bales. Closing stocks are expected at 10.5m bales, slightly higher than last year.
• China: Output lifted to 32.5m bales with mill use at 38.5m bales; closing stocks fall to 34m bales, marking a notable year-on-year decline.
• Brazil: A strong export campaign continues, with shipments projected at 14.3m bales, up more than 1.2m from last month, keeping Brazil among the world’s largest exporters.
• Australia: Production raised to 18.25m bales, reflecting favourable conditions, with exports projected at 14.3m bales.

Market Implications
Analysts suggest the combination of slightly higher U.S. production, robust global consumption and lower world stocks could lend support to international cotton prices despite USDA keeping the U.S. season-average farm price unchanged at 64 cents per pound. The tightening of global inventories signals that any adverse weather developments or demand shocks in major consuming countries could have a more pronounced impact on trade flows and pricing in the months ahead.