Global cotton market faces bearish outlook on higher output, weak demand

The global cotton market remains bearish as forecasts of increased production and concerns over weak consumption weigh on prices, analysts say. BMI, a unit of Fitch Solutions, expects strong harvests in key markets for 2024-25 to cap price gains, while demand struggles amid rising competition from man-made fibres.

The International Cotton Advisory Council (ICAC) highlighted challenges for farmers making planting decisions in uncertain conditions. Meanwhile, the US Department of Agriculture (USDA) noted that cotton’s market share in global fibre consumption has fallen below 25 percent, limiting growth prospects for cotton product imports. US cotton imports from China have nearly halved since 2010, while man-made fibre imports surged 30 percent.

For 2024-25, the USDA raised its global production estimate by 500,000 bales to 121 million, led by a 750,000-bale rise in China. BMI projects a 6.3 percent output increase to 120.3 million bales, with notable gains in China, Brazil, and the US.

Cotton prices remain under pressure, with ICE-listed second-month futures forecast to average 72.2 cents per pound in 2025. Futures recently hit 63 cents, the lowest since August 2020, though strong US export sales have sparked a modest rebound.