U.S. Cotton Exports Projected To Hit 9-Year Low In 2024-25

The U.S. cotton exports for 2024/25 are forecast at 11.3 million bales, down over 400,000 bales from the previous year and marking a 9-year low. Despite higher domestic supplies, competitive pricing from Brazil and a significant drop in Chinese demand are key factors impacting shipments.

Brazil’s cotton production for 2024-25 is estimated at 16.9 million bales, 16% higher than the previous year’s record. The combination of robust supply growth and a significantly depreciated currency has made Brazilian cotton prices more competitive. Recent price quotes show Brazilian basis levels around 800 points, while U.S. origin prices exceed 1,200 points. Over the past five years, the Brazilian currency has depreciated nearly 40% against the US dollar, solidifying Brazil’s position as the lowest-cost exporter among major producers.

Falling global demand is another factor weighing on the US exports. World imports for 2024-25 are expected to decline by more than 2 million bales, with China’s imports dropping over 40% to 8.5 million bales. This decline is attributed primarily to reduced demand for government reserves. From August to November 2024, the US cotton sales and shipments to China plummeted to around 700,000 bales, less than a quarter of last year’s volume and the lowest in 9 years.

The uncertain political climate has further hampered forward buying from Chinese buyers, favouring Brazil’s competitively priced cotton.