As of April, an upward price movement was observed in the global cotton market. In particular, the increases in NY/ICE futures and the A Index were interpreted as signs of recovery in the markets, while price increases in the Chinese market remained more limited. At the same time, updates in production, consumption and trade data indicate a complex outlook for the sector in the upcoming period.
Overall Price Increase, More Limited Growth in China
A notable increase was recorded in benchmark cotton prices throughout the past month. May NY/ICE futures rose from around 65 cents/lb to approximately 70 cents/lb, while December futures increased from 69 cents/lb to 75 cents/lb. The A Index also showed a strong rise, moving from 75 to 82 cents/lb during the same period.
In the Chinese cotton market, the increase remained more limited. The CC Index rose from 109 cents/lb to 111 cents/lb, while the pace of growth slowed compared to earlier periods of the year. More pronounced price increases were observed in India and Pakistan. Prices in India reached 83 cents/lb, while in Pakistan they climbed rapidly to around 85 cents/lb.
Upward Revisions in Supply and Demand Data
The latest report by the United States Department of Agriculture (USDA) pointed to increases on both the production and consumption sides for the 2025/26 season. Global production rose to 121.9 million bales, while mill use increased to 119.1 million bales. Along with revisions in beginning stocks, an increase in ending stocks was also observed.
The most significant production increases were recorded in China, India and Pakistan. On the consumption side, China and India stood out with increases, while limited declines were recorded in Bangladesh and Vietnam. Global trade volume, on the other hand, declined slightly to 43.7 million bales.
Energy Prices and Geopolitical Risks Are Decisive
Price movements in the cotton market are driven not only by supply-demand dynamics but also by geopolitical developments. Tensions centered in Iran and developments in the Strait of Hormuz have led to significant volatility in energy prices. Crude oil prices experienced changes of nearly 20% within a short period, directly affecting production costs.
Rising energy costs are also putting pressure on cotton production through fertilizers and agricultural inputs. The fact that a significant portion of global fertilizer trade passes through the Strait of Hormuz increases supply chain risks. At the same time, rising polyester production costs are among the factors indirectly supporting cotton prices.
Production Outlook and Planting Area Discussions
The acreage report released in the United States indicates a limited increase in cotton planting areas for the 2026/27 season. However, planting areas are expected to decline in major producing countries such as China and Brazil. This raises the possibility of a decrease in global production.
According to preliminary estimates, global cotton production may decrease by approximately 3.9 million bales in the 2026/27 season. On the other hand, expectations of increased consumption strengthen the risk of tightening on the supply side.
Position Shifts in Markets and Outlook
A significant shift has also been observed in futures markets. After maintaining net short positions for a long period, speculators have moved back to net long positions as of March, which is interpreted as a signal of a change in market direction.
All these developments indicate that cotton prices may find support in the short term; however, rising costs and global uncertainties suggest that the sector will continue to maintain a cautious outlook.
