Cotton futures prices have struggled to gain traction over the past six months. The last time nearby cotton futures were above 75 cents was June 28, 2024. Since July, nearby cotton futures prices have traded mostly between 66 and 73 cents. New crop (December 2025) futures prices are currently below 70 cents, which will not provide attractive pricing opportunities for cotton producers. Additionally, if new crop futures prices remain low through the crop insurance price determination period, the safety net will be diminished and will likely result in decreased planted acres in the United States. Global supply and demand have played a role in low cotton prices. Figures 1 and 2 show global cotton demand and Brazil cotton production which have contributed to lower cotton prices.
Global cotton demand has been flat for more than two decades and per capita cotton consumption has trended lower (Figure 1). Projected global cotton consumption for the 2024/25 marketing year is 116 million 480 lb bales, the same as 2010/2011. Competition with synthetic fibers has resulted in a lower market share for cotton and reduced demand. Improved demand will be essential if cotton prices are to improve.
Compounding the challenges for U.S. cotton producers has been the rise of Brazil. In the last ten years, Brazil has more than doubled cotton production from 7.18 million 480 lb bales to 16.9 million 480 lb bales (Figure 2). The rise of Brazil cotton production has provided substantial competition for export markets. The combination of increased cotton production and flat global demand will continue to weigh on global cotton prices.
Figure 1. Global Cotton Consumption and Per Capita Consumption, 2000/01-2024/25
Figure 2. Brazil Cotton Production, 2000/01-2024/25
References
USDA Foreign Agricultural Service (FAS), Production Supply and Distribution. Accessed at:https://apps.fas.usda.gov/psdonline/app/index.html#/app/home.
Barchart.com. Nearby Cotton Futures Contract. Accessed at: https://www.barchart.com/futures/quotes/CTH25/interactive-chart.
Smith, Aaron. “Flat Global Demand and Increased Brazil Production Provide Challenges for U.S. Cotton Prices.” Southern Ag Today 5(5.3). January 29, 2025. Permalink
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