Global Cotton Market – January 2026

1. Price Movements: Stability and Regional Hotspots

Over the past month, the market showed clear divergence between international benchmarks and domestic prices in Asian markets:

• A Index: Remained stable, fluctuating around 74 cents/lb.

• China: The CC Index (3128B) rose sharply from 96 to 103 cents/lb (equivalent to an increase from RMB 15,000 to RMB 15,900 per metric ton). This increase was partly supported by the appreciation of the Chinese yuan against the U.S. dollar, which strengthened to 6.98 RMB/USD.

• India: Spot prices for Shankar-6 cotton increased from 74 to 78 cents/lb (equivalent to a rise from INR 52,600 to INR 55,200 per candy).

• United States: NY/ICE March futures surpassed the 65 cents/lb level, while December futures reached their highest level since September, approaching 70 cents/lb.

2. Global Supply and Demand Balance for the 2025/26 Season: Declining Stocks

According to the latest USDA report, global supply and demand estimates have been revised toward a tighter balance:

• Global production: Forecast at 119.4 million bales, down approximately 355,000 bales from the previous estimate.

• Mill use: Expected to increase slightly to 118.9 million bales.

• Ending stocks: As a result of lower production and higher consumption, global ending stocks were revised downward by 1.5 million bales to 74.5 million bales.

3. Situation in Major Producing and Importing Countries

• China: Production is projected to reach 34.5 million bales, an increase of 1 million bales, marking the highest output since the 2012/13 season. However, China’s policy focus on food security may lead to a reduction in cotton acreage in favor of grain crops.

• India and the United States: Both countries recorded downward revisions in production forecasts. India’s output is estimated at 23.5 million bales, while U.S. production is projected at 13.9 million bales.

• Vietnam: Vietnam continues to maintain its position as a key cotton importing market. Cotton imports and consumption for the 2025/26 season are forecast to remain stable at approximately 8.1 million bales.

4. Market Outlook and Future Trends

The market is currently facing several factors influencing planting decisions for the 2026/27 season:

• Crop competitiveness: Current cotton prices remain less attractive to farmers compared to alternative crops such as corn and soybeans, which could result in a contraction of global cotton acreage.

• Policy support: Recent support payments in the United States, along with favorable yields, may help prevent a sharp decline in planted area.

• Outlook for the next season: Global cotton production for the 2026/27 season is expected to trend lower. If growth in mill consumption is sustained, the market may receive price support as the currently ample exportable stocks are gradually drawn down.
  
  
  Source: VITAS, compiled from Monthly Economic Letter – Cotton Incorporated (January 2026)