The June 2026 issue of Cotton This Month projects a modest contraction in global cotton area, production, and trade during the 2026/27 season, reflecting weaker demand sentiment, rising production costs, and shifting environmental factors across major producing nations.
According to the report, global cotton area is projected to decline by 1% to 30.1 million hectares, while world production is expected to decrease by 2% to 25.7 million tonnes. Global cotton trade is also forecast to fall by 1.4% to approximately 9.5 million tonnes.
Key Global Market Drivers:
- Surging Input Costs: Global fertilizer prices rose by more than 12% in Q1 2026, driven by Middle East geopolitical tensions and export disruptions in the Strait of Hormuz.
- Strategic Downsizing: Countries like China are intentionally excluding lower-efficiency, low-yielding, and water-stressed plots to favor more productive land.
- Weather and Abandonment Pressures: While El Niño supports certain regions, 98% of the U.S. crop faces drought-like conditions, increasing abandonment risks. Meanwhile, Australia faces extreme dryness, and Pakistan struggles with erratic weather and pest pressures.
- Alternative Crop Competition: High competition from crops like corn, alongside a soft global market and pressure from man-made fibers, is impacting cotton profitability.
Country Outlooks
- China: Expected to remain the world’s largest cotton producer despite a projected 0.5% decline in area (to 3 million hectares) and a 4% decline in production to 7 million tonnes. Favorable weather conditions are expected to support strong crop performance, yielding a globally unmatched 2,421 kg/ha.
- United States: Planted area is projected to decrease by 6% to 2.9 million hectares, pulling production down 4% to 2.8 million tonnes — the lowest level in three seasons. Despite a 98% drought footprint threatening abandonment rates, yields are projected 2% higher due to El Niño, and exports are forecast to rise 3%.
- Brazil: Following four consecutive seasons of expansion, Brazil’s cotton area is projected to contract by 6% to 2 million hectares, leading to a 10% drop in production to 3.8 million tonnes. The reduction is primarily concentrated in Mato Grosso due to weak demand, rising fertilizer costs, and strong competition from corn.
- India: India will maintain the world’s largest cotton area, holding steady at approximately 11.8 million hectares. Production is projected to expand by 8% due to normal monsoon forecasts. The additional output is expected to be absorbed by growing domestic consumption and strong yarn exports to China.
- Australia: Driven by extreme dryness, reduced irrigation water, and high input costs, Australia’s cotton area and production are both projected to decline by 10%, bringing total production to approximately 937,000 tonnes.
- Pakistan: Production is projected to decline by 18% to approximately 900,000 tonnes despite an unchanged cultivation area. Sector performance remains heavily constrained by poor seed quality, high pest pressure, and unpredictable weather patterns.
