International Cotton Advisory Committee (ICAC): Analysis Of The Trend Of Global Cotton In The Next Two Years

The global production and demand forecast for August released by the International Cotton Advisory Council (ICAC) forecasts the cotton market in 2024/25. ICAC believes that the global cotton market is expected to continue to recover moderately under the support of increased cotton consumption and stable output. However, the cotton market still faces some challenges, including weather change, macroeconomic and geopolitical issues. The future performance of the market largely depends on how these factors will evolve and have an impact on the major cotton producing countries and consumer countries. It is expected that the cotton output, consumption and trade volume will change significantly in 2024/25.

　　 Cotton yield:

In 2024/25, the global cotton output is expected to be 26.33 million tons, with a year-on-year growth of 9.2%, the highest level since 2017/18. This is mainly due to the rebound of cotton output in major cotton producing countries such as the United States, India, China, Brazil and Pakistan.

　　 U.S.A:

Due to favorable weather conditions and advances in agricultural technology, it is expected that the cotton output in the United States will increase significantly to 3.7 million tons, up from 2.6 million tons last year. The growth is due to the increase in planting area, unit yield and disease resistance of cotton.

　　 India:

The cotton output in 2024/25 is estimated to be 5.5 million tons. The increase in yield is due to the expansion of planting area and the adoption of high-yield transgenic cotton varieties, which reduces the demand for pesticides.

The Indian cotton sector benefits from government initiatives aimed at supporting farmers, such as the Minimum Support Price (MSP) and various subsidies. In addition, the country's diversified climate conditions and a large number of agricultural labor force have promoted its considerable production capacity.

　　 Brazil :

It is estimated that the annual output in 2024/25 will be 3.65 million tons. The favorable climate conditions, technological progress and large-scale agricultural operation will benefit the cotton production in this country. Brazilian cotton is famous for its high quality, which meets the strict requirements of the international market.

　 Pakistan:

Pakistan's cotton production in 2024/25 is estimated at 1.3 million tons. The country faces challenges such as food scarcity, pest infestation and outdated agricultural practices. However, efforts to modernize the sector, including the introduction of GM cotton varieties and better pest management techniques, are expected to increase productivity.

　　 Cotton consumption:

The global cotton consumption is expected to increase to 25.87 million tons, the highest level since 2018/19, due to the rising demand of textile and clothing producing countries such as China, India, Pakistan, Bangladesh and Vietnam.

　　 China:

China is still the largest cotton consumer, with an estimated cotton consumption of 8.5 million tons. With the support of domestic and international demand for cotton products, China's textile industry continues to prosper. China is also investing in advanced textile manufacturing technology to improve production efficiency and product quality. The government has implemented policies to support the textile industry, including subsidies and incentives for technology upgrading. In addition, China's "Belt and Road Initiative" is expected to strengthen China's textile trade routes and market access, further promoting cotton consumption.

　　 India:

Driven by strong demand in the textile industry, India's consumption is expected to reach 5.6 million tons. The government's support for the textile industry and favorable trade policies contributed to this growth. India has also increased its investment in infrastructure of textile manufacturing industry, which benefits from the huge domestic market and strong export demand.

　 Pakistan:

The cotton consumption is expected to be 2.1 million tons. The country's textile industry is a major contributor to its economy, providing employment opportunities for millions of people and generating considerable export income. Government initiatives to modernize the textile sector and improve energy supply are expected to support increased cotton use.

　　 Bangladesh and Vietnam:

The cotton consumption of Bangladesh and Vietnam is expected to be 1.85 million tons and 1.5 million tons respectively. The expansion of their textile manufacturing capacity and the growing export demand are the key factors to promote their consumption. Bangladesh's textile industry is mainly export-oriented, and its main markets include the United States and Europe. With the support of foreign direct investment and government incentives, Vietnam's textile industry is also growing rapidly. Its strategic location and developed infrastructure make it an attractive textile manufacturing destination.

　　 Cotton export:

In 2024/25, the global cotton export volume is expected to continue to recover from the low point of the previous year and increase to 10.3 million tons, the highest level since 2020/21. The United States will remain the largest cotton exporter, followed by Brazil, Australia, Turkey and India.

　　 U.S.A:

US cotton exports are expected to be 2.83 million tons, supporting high-quality production and competitive pricing. The main markets of American cotton include China, Vietnam and Bangladesh. The United States has benefited from the establishment of a good trade network and a strong logistics infrastructure, which has promoted efficient export operations. The U.S. cotton industry also uses marketing programs and trade agreements to enhance its global reach.

　　 Brazil:

Brazil's export volume is expected to reach 2.8 million tons, benefiting from competitive production costs and expanding market access in Asia and Europe. The country has invested in improving its port infrastructure and logistics capacity to support effective export business. Brazilian cotton is known for its quality and consistency, making it the top choice for global textile manufacturers. The country is close to the main markets in Europe and Asia, providing logistics advantages and reducing transportation costs and delivery time.

　　 India:

Driven by overproduction and competitive prices, India's cotton exports are expected to be 300000 tons. China continued to expand its market scope and exported a large amount to China, Bangladesh and Vietnam. India's strategic location and extensive trade network promote its position as a major exporter. The Government of India has supported the cotton export sector through various initiatives, including encouraging exports and improving infrastructure. In addition, India has benefited from long-term trade relations with major cotton importing countries.

　　 Australia:

Australia is expected to export 1.2 million tons of cotton to support high-quality production and efficient supply chain management. The country's cotton is highly sought after in the Asian market because of its quality and reliability. Australia is close to the main markets in Asia, providing a competitive advantage in logistics and market access. Australia's cotton industry focuses on sustainable agricultural practices and technological innovation to improve productivity and quality. Government support and industry initiatives have contributed to the sustainability and high standards reputation of Australian cotton.

　　 Market prospect in 2024/25:

In 2024/25, the global economic outlook is still uncertain, and persistent challenges such as inflation, supply chain problems and geopolitical situations affect the market. Stakeholders need to monitor economic indicators and adjust strategies accordingly. Geopolitical tensions, trade tensions and geopolitical conflicts pose risks to the global cotton market. It is necessary to keep abreast of changes in trade policies and be ready to adapt to changing markets.

　　 Climate risk :

Adverse weather events such as droughts, floods and hurricanes pose a major risk to cotton production. Professional executives need to invest in climate adapted agricultural practices and technologies to mitigate these risks.

　 The global economic outlook remains uncertain:

Persistent challenges such as inflation, supply chain chaos and geopolitical tensions affect markets. Stakeholders need to monitor economic indicators and adjust their strategies accordingly.

　　 Geopolitical tensions:

Trade tensions and geopolitical conflicts pose risks to the global cotton market. Stakeholders need to keep abreast of changes in trade policies and agreements and be ready to adapt to changing market dynamics.

　　 Price outlook:

In 2024/25, the global and regional cotton markets are expected to change significantly, with output and consumption shaping the market. The United States, India, China and Brazil will play an important role in cotton production, and the Asian textile industry will promote the growth of cotton consumption. In 2024/25, the global and regional cotton markets will be characterized by stable production, moderate recovery of consumption and trade growth. Although the price is still under pressure, the overall market outlook is positive and is expected to continue to grow in the next few years.

In 2024/25, the global ending inventory is expected to increase to 19 million tons, so the international cotton price is expected to remain at a low point in the past five years. As cotton production is higher than consumption, cotton prices will continue to be under pressure. ICAC estimates that the Kotruk A Index will be 92.00 cents to 97.00 cents in 2024/25, with a midpoint of 94.00 cents per pound.