Cotton production poised for rebound in 2024-25, USDA's May WASDE report predicts

The U.S. Department of Agriculture's (USDA) May 2024 World Agricultural Supply and Demand Estimates (WASDE) report offers a positive outlook for the cotton industry, projecting a rebound in global production for the upcoming 2024/25 season. This news comes after a period of decline and stagnant growth in recent years.

Global cotton production on the rise

The USDA anticipates a global cotton production increase of 3 per cent compared to the previous season. This translates to an estimated 107 million bales, with the United States accounting for a significant portion of the growth. This growth is primarily driven by an anticipated 1 per cent increase in global cotton area, with the United States leading the charge.

The US leads the charge

The US cotton industry is expected to experience a substantial production increase, driven by a nearly 8 per cent rise in planted area and a significant decline in abandonment rates. This optimism translates to a projected US production of 16.0 million bales, and a substantial decrease in abandonment rates (down 15 per cent) a welcome development after a challenging year.

Improved consumption and trade

The WASDE report also forecasts a rebound in global cotton consumption, following a period of decline. This is attributed to a recovering global textile supply chain, with a projected increase of 4 per cent compared to the previous season. Additionally, world cotton trade is expected to reach a four-year high, driven by increased production and consumption levels.

Market implications

The anticipated rise in cotton production and consumption is likely to have a moderating effect on cotton prices, which have experienced fluctuations in recent seasons. However, with production still expected to slightly exceed consumption, a modest increase in global ending stocks is projected.

The WASDE report paints a promising picture for the cotton industry in the coming season. While ongoing weather conditions and other factors can influence production outcomes, the projected increase offers a sigh of relief for cotton producers and stakeholders worldwide.