USDA forecasts global cotton stocks at lowest since 2018/19 as 2026/27 production falls 5.5% and prices rise 15% year-on-year

Summary

The USDA's June 2026 Cotton: World Markets and Trade circular projected 2026/27 global cotton output at 116 million bales, down 6.6 million bales (5.5%) from the prior season. World stocks in 2026/27 are forecast at their lowest level since 2018/19 and the stocks-to-use ratio at its smallest since 2010/11. Mill use is forecast at approximately 121.8 million bales, the highest in six years, driven by recovering demand in Asian textile markets. ICE cotton futures were trading near 78 cents per pound in late June 2026, up about 15% year-on-year. USDA and Texas A&M agricultural economists project prices reaching approximately 90 cents per pound in 2026/27 on the back of the tightening stocks situation. The decline in production is distributed across multiple major growing countries, with both area and yields lower year-on-year, indicating a structural rather than weather-driven contraction.

The split

US cotton producer associations and agricultural economists emphasised the price improvement after two seasons near 80 cents and flagged the potential for acreage expansion in the US Southwest for the 2027 planting cycle if prices hold above 85 cents. Textile and apparel industry bodies in Bangladesh, Vietnam, and Pakistan, which are major cotton-yarn importers, warned that the price trajectory was compressing margins for garment manufacturers already facing rising energy and labour costs, and that some input buyers were shifting toward polyester blends. Chinese mill operators, the world's largest cotton consumers, were reported to be extending hedges at current prices rather than covering forward at projected 90-cent levels, adding a speculative element to the futures curve.

By the numbers

• 116.0 million bales: 2026/27 global cotton production forecast
• 6.6 million bales (5.5%): production decline from 2025/26
• Lowest stocks since 2018/19 (absolute level)
• Smallest stocks-to-use ratio since 2010/11
• 121.8 million bales: 2026/27 mill use forecast (highest in 6 years)
• ~78 cents per pound: ICE cotton in late June 2026 (+15% year-on-year)
• ~90 cents per pound: USDA/TAMU price projection for 2026/27

Why it matters

The Cotton market's move toward multi-year lows in stocks-to-use is arriving simultaneously with rising textile demand, creating the tightest supply-demand balance since around 2010. For cotton-producing countries that include the United States, India, Brazil, China, and Pakistan, higher prices create both revenue opportunities and political risk if food-adjacent textile commodities become a visible inflation driver. The 5.5% production drop is large enough to be felt in global clothing supply chains without a compensating draw-down of strategic stocks.

What to watch

• Whether US cotton acreage expansion in 2026/27 planting partially offsets the production shortfall
• China's cotton import levels for the 2026/27 season as mills balance domestic and imported supply
• Whether ICE cotton futures reach the projected 90-cent level and whether that level triggers demand destruction in price-sensitive apparel markets
• December 2026 USDA production updates revising the 116-million-bale forecast