The United States Department of Agriculture (USDA) released its September World Agricultural Supply and Demand Estimates (WASDE) report, providing an updated outlook for the global cotton market in the 2024-25 marketing year. The report indicates increased projections for production, consumption, and ending stocks compared to the August estimates.
Global cotton production
Downward revision: Global cotton production for 2024-25 is projected to decline by 2.2 million bales to 113.7 million bales compared to the August estimate. This is due to reduced output in India, China, and Pakistan are the primary drivers of this downward revision.
Table: Global cotton production estimates
|
Region |
Production (mn bales) |
Change from August |
|
United States |
18 |
+0.5 |
|
China |
28.5 |
-1 |
|
India |
24.5 |
-1 |
|
Pakistan |
5 |
-0.5 |
|
Brazil |
13 |
- |
|
Other |
24.7 |
- |
|
World |
113.7 |
-2.2 |
Global cotton consumption
Slight increase: Even as production is expected to fall, global cotton consumption is projected to increase slightly to 116.0 million bales, a rise of 0.4 million bales from the August estimate. This is because consumption growth in Bangladesh, Vietnam, and Turkey is expected to offset lower consumption in China and India.
Table: Global cotton consumption estimates
|
Region |
Consumption (mn bales) |
Change from August |
|
China |
35 |
-0.5 |
|
India |
25.5 |
-0.5 |
|
Pakistan |
10 |
- |
|
Bangladesh |
8.5 |
+0.5 |
|
Vietnam |
7.5 |
+0.3 |
|
Turkey |
6 |
+0.2 |
|
Other |
23.5 |
- |
|
World |
116 |
+0.4 |
As a result of a dip in production and higher consumption global cotton stocks are expected to decline significantly. Cotton ending stocks for 2024-25 are projected to decrease to 81.2 million bales, a decline of 6.5 million bales from the August estimate.
China’s ending stocks are estimated at 34.5 million bales, accounting for a significant portion of global stocks. India’s ending stocks are projected at 5.5 million bales. And the US ending stocks are estimated at 3.5 million bales.
Table: Global cotton supply and demand (million bales)
|
Item |
2023-24 (actual) |
2024-25 (August) |
2024-25 (September) |
|
Beginning stocks |
83 |
84.5 |
84.5 |
|
Production |
114.5 |
121 |
120.4 |
|
Consumption |
117 |
120 |
120.7 |
|
Ending stocks |
80.5 |
85.5 |
81.2 |
Reasons for current USDA estimates
India: The downward revision in India's production is linked to erratic monsoon rains and pest infestations. However, consumption remains robust, driven by a strong textile industry and growing domestic demand.
China: Lower cotton acreage and adverse weather conditions are impacting production in China. Consumption is projected to increase, driven by a thriving textile industry and growing domestic market.
Pakistan: Floods and pest attacks have affected cotton crops in Pakistan.
United States: Drought conditions have affected yields in major cotton-growing regions, leading to a lower production estimate. Despite this, consumption is expected to remain stable, supported by domestic textile mills and export demand.
Bangladesh, Vietnam, Turkey: Robust textile industries and export demand are driving consumption growth.
The USDA September report underscores the dynamic nature of the global cotton market. While production forecasts have been adjusted downwards in some major producing countries, consumption remains strong, particularly in China and India. The evolving supply and demand dynamics will continue to shape cotton prices and trade flows in the coming months. Market participants will closely monitor weather patterns, government policies, and economic conditions in key cotton-producing and consuming countries for further insights into the market's trajectory.
