Global cotton consumption is forecast to rise slightly to 121.7 million bales in marketing year 2026/27 (August-July), a six-year high if realized
The projection aligns with the 25-year average for growth in cotton demand after it slowed in 2025/26.
An expected drawdown in stocks, resilient consumer demand, and global oil supply shortages support demand despite higher cotton prices and economic uncertainties.
“Global cotton production is forecast to fall 5 percent to 116.0 million bales in 2026/27 after reaching the highest level in more than a decade in 2025/26,” USDA informed in its latest May 2026 report.
As a result, global consumption growth will be supported by a projected drawdown in ending stocks. Global trade is only projected down slightly year over year as top exporters Brazil and the United States use stocks to maintain shipments.
Stocks in top-consuming countries China and India are also forecast down year over year as their domestic consumption grows.
Global cotton demand is also supported by resilient consumer demand in top cotton product consuming countries like the United States, China, and the European Union. U.S. consumer demand for apparel products remained strong in 2025 as retail sales at clothing stores grew 8 percent.
Despite increased demand, U.S. imports of apparel products fell slightly in 2025 as uncertainty around U.S. tariffs disrupted sourcing decisions along the textile supply chain.
The gap between imports and retail sales suggests that retailers will need to replenish inventories in 2026, especially as U.S. economic growth is forecast to accelerate in 2026 and tariffs have been reduced below 2025 levels.
Retail sales data for China also shows strong domestic demand for apparel despite slowing economic growth as stimulus efforts focus on household consumption.
Furthermore, Chinese exports of cotton products grew in 2025 as exporters were able to expand in the European Union and other markets in response to high tariffs in the U.S. market.
As a result of these changing trade patterns, EU cotton product imports hit a record high in 2025 despite muted economic growth and retail sales.
This suggests that EU cotton product inventories are high at the start of 2026 and demand for further imports may be weaker than in the United States.
Cotton demand growth continues to be tempered by competition with synthetic fibers, but the recent oil supply shock has given cotton a potential advantage over polyester in the coming months.
Polyester prices have risen along with oil prices and have been more volatile than usual, but the simultaneous rise in cotton prices has weakened the price advantage cotton would have gained.
Global oil supply shortages are expected to cause shortages in feedstock for synthetic fibers that will create ripple effects along the textile supply chain that benefit cotton.
Higher oil prices are also expected to drive inflation in the cost of consumer goods around the world which will moderate the demand for textiles and apparel, consequently limiting the potential growth in cotton demand.
The strength of the impact on the textile supply chain and consumer demand will depend on how long oil prices remain elevated.
Image courtesy: Morgan Ferrar
