US cotton exports face pressure amid global shifts

The 2024-25 cotton marketing year has started in a sluggish manner for exports, with shipments significantly below seasonal averages. Declining demand from China, the largest importer, has been a key factor. Although US exports to Pakistan and Vietnam have gone up, rising 77 per cent and 60 per cent, respectively they remain insufficient to offset the broader downturn.

China’s cotton imports, however, have increased, reaching 2.28 million bales from January to September 2024, more than double the volume in the same period in 2023. Brazil has emerged as the top cotton supplier to China, capitalizing on higher production and competitive pricing, surpassing US exports. Meanwhile, Australia has also benefited from strong exports to China following the partial lifting of restrictions, despite tighter stockpiles.

US exports are projected to decline further, with the USDA forecasting 11.50 million bales for 2024/25, the lowest in nine years. Shipments have reached just 13 per cent of the USDA target, the slowest pace since 2017/18. Adverse weather impacting US production and higher prices compared to Brazil have exacerbated the situation.

As global competition intensifies, US exporters must rely on alternative markets like Pakistan and Vietnam to mitigate declining Chinese demand. However, robust supplies from Brazil and Australia pose ongoing challenges for the US cotton industry.