ICAC Report Projects Lower Cotton Output and Trade Amid Rising Costs and Weather Challenges
The June 2026 edition of Cotton This Month projects a modest decline in global cotton area, production, and trade during the 2026/27 season. The outlook reflects weaker demand sentiment, higher production costs, environmental pressures, and changing cultivation patterns across key cotton-producing countries.
According to the report, global cotton area is expected to decrease by 1% to 30.1 million hectares. World cotton production is projected to decline by 2% to 25.7 million tonnes, while global cotton trade is forecast to fall by 1.4% to approximately 9.5 million tonnes.
Factors Influencing the Global Cotton Market
Several developments are shaping the outlook for the 2026/27 season.
Rising Input Costs
Global fertilizer prices increased by more than 12% during the first quarter of 2026. The increase has been linked to geopolitical tensions in the Middle East and export disruptions in the Strait of Hormuz, adding pressure on cotton production economics worldwide.
Shifts in Land Utilization
Some producing countries are reducing cultivation on less productive land. China, for example, is excluding lower-efficiency, low-yielding and water-stressed plots in favor of more productive growing areas.
Weather-Related Risks
Weather remains a major factor affecting production prospects. While El Niño conditions are expected to support some growing regions, 98% of the cotton crop area in the United States is experiencing drought-like conditions, increasing the risk of crop abandonment. Australia is facing severe dryness, while Pakistan continues to deal with erratic weather and pest-related challenges.
Competition from Alternative Crops
Cotton growers are also facing stronger competition from crops such as corn. Combined with soft global demand and pressure from man-made fibers, profitability across the cotton sector remains under strain.
Country Outlook
China
China is expected to remain the world’s largest cotton producer despite a projected 0.5% decline in planted area to 3 million hectares. Production is forecast to decrease by 4% to 7 million tonnes. Favorable weather conditions are expected to support yields of 2,421 kg/ha.
United States
Cotton planted area in the United States is projected to decline by 6% to 2.9 million hectares. Production is expected to fall by 4% to 2.8 million tonnes, representing the lowest level in three seasons.
Despite drought conditions affecting 98% of the crop area, yields are projected to improve by 2% due to El Niño influences. Cotton exports are forecast to increase by 3%.
Brazil
After four consecutive seasons of expansion, Brazil’s cotton area is projected to decline by 6% to 2 million hectares. Production is expected to decrease by 10% to 3.8 million tonnes.
The decline is primarily concentrated in Mato Grosso and is attributed to weak demand, rising fertilizer costs and competition from corn.
India
India is expected to retain the world’s largest cotton cultivation area at approximately 11.8 million hectares.
Production is projected to rise by 8%, supported by forecasts of a normal monsoon season. The additional output is expected to be absorbed by increasing domestic consumption and continued yarn exports to China.
Australia
Australia’s cotton area and production are both forecast to decline by 10% due to extreme dryness, reduced irrigation water availability and high input costs.
Total production is expected to reach approximately 937,000 tonnes.
Pakistan
Pakistan’s cotton production is projected to decline by 18% to approximately 900,000 tonnes despite no change in cultivated area.
The sector continues to face challenges related to poor seed quality, heavy pest pressure and unpredictable weather conditions.
ICAC Price Outlook
The Secretariat’s current Cotlook A price forecast for the 2025/26 season ranges from 75 to 80 cents per pound, based on prevailing supply and demand estimates. The midpoint of the forecast stands at 78 cents per pound.
ICAC’s price projections are prepared by Ms Lorena Ruiz, ICAC Economist.
Statistical Data Portal
ICAC noted that its Statistical Data Portal is updated continuously throughout the month to reflect the latest market developments and statistical changes.
