Cotton Outlook Steady Domestically, While Global Stocks Rise on Weaker Demand

According to the USDA’s April 2024 update, the 2024/25 U.S. cotton outlook saw only minor adjustments this month, with exports trimmed and ending stocks increased accordingly. Meanwhile, the global cotton market reflects declining demand and reduced trade, leading to an uptick in ending stocks.

• U.S. cotton exports are reduced to 10.9 million bales, raising ending stocks to 5.0 million.

• Global cotton consumption falls by 520,000 bales, primarily due to weaker demand in China and Indonesia.

• World ending stocks increase by over 520,000 bales, reflecting softening demand and trade reductions.

The U.S. cotton balance sheet for 2024/25 remains relatively stable, with the only revision being a 100,000-bale decrease in projected exports to 10.9 million bales. This directly results in a 100,000-bale increase in ending stocks, now forecast at 5.0 million bales. The season-average upland farm price is unchanged at 63 cents per pound.

Global cotton trade is seeing widespread contractions. Exports have been reduced for major producers including the United States, Australia, Brazil, and Cote d’Ivoire, with increases only for Turkey and Kazakhstan. Imports are also down this month, mainly due to decreased demand in China and Indonesia, despite a rise in Turkey. These shifts reflect broader slowdowns in global textile mill use, particularly in China and Indonesia.

Global cotton production is lowered slightly by 69,000 bales, with losses in Argentina and West Africa outweighing gains in China. Weaker global consumption, down 520,000 bales this month, is the main driver behind rising ending stocks, now up over 520,000 bales. Inventories have increased in major countries such as China, Brazil, and the U.S., signaling a softer demand outlook for the 2024/25 season.

With cotton trade and mill demand under pressure, businesses can benefit from price protection strategies to manage margin risks and inventory costs.

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