High Domestic Cotton Stocks: Challenges And Opportunities From A Global Perspective

At present, the domestic cotton inventory is at a stage high, which reflects that the global textile industry chain is undergoing profound changes. According to the latest data of China Cotton Association, China's cotton commercial inventory reached a record high in January 2025 in the year 2024/2025, and the inventory pressure is high. The domestic cotton supply and demand pattern is loose this year. USDA's monthly report in February predicted that China's cotton output in 2024/2025 would be 6.75 million tons, an increase of 795000 tons year-on-year, or 13.3%; The expected cotton consumption decreased by 3.6% year-on-year to 8.165 million tons. In the case of strong supply and weak demand, the commercial inventory of cotton accumulates rapidly.

China's cotton commercial inventory reached a peak of 5.779 million tons in 2024/2025 in the middle of January 2025, a new high since statistics, with a year-on-year increase of about 250000 tons. High inventory is one of the main reasons for the weak trend of Zheng cotton price this year. From the listing of domestic cotton futures to the middle of February 2025, the 1/4 quantile of the settlement price of Zheng Mian's main contract is about 13592 yuan/ton. The price of Zheng Mian's main contract in 2024/2025 fluctuates around this price for a long time, which is at a low historical level. It reached a new high in recent five years. Behind this data is the result of multiple factors such as dramatic changes in the international political and economic pattern, structural adjustment of the consumer market, and technological revolution.

1、 Cotton industry under the global political and economic pattern

The turbulence of the international political situation has a profound impact on the pattern of cotton trade. The trade friction between China and the United States has led to the obstruction of China's textile exports. The United States has imposed tariffs on China's textiles, which directly affects cotton demand. At the same time, the conflict between Russia and Ukraine triggered fluctuations in global energy prices, leading to changes in the price competition pattern of chemical fiber and cotton. Geopolitical risks have exacerbated the uncertainty of the global supply chain. Many textile enterprises have begun to adjust their procurement strategies and increase their inventories to cope with potential risks.

The rise of global trade protectionism has further exacerbated market uncertainty. Major economies have introduced industrial protection policies, which has hindered the flow of global cotton trade. This trade barrier not only affects the interests of cotton exporting countries, but also increases the cost pressure of importing countries.

two The dual impact of weak consumer market and technological revolution

The slowdown of global economic growth has led to weak textile consumption demand. Inflation pressure in major consumer markets such as Europe and the United States has curbed clothing consumption, and fast fashion brands have a serious inventory backlog. This demand side shrinkage is directly transmitted to the upstream cotton industry, resulting in inventory backlog.

AI technology is reshaping the textile industry ecology. The intelligent production management system has improved production efficiency, but also led to traditional overcapacity. The AI driven demand forecasting and inventory management system is changing the procurement mode of enterprises. This technological innovation brings both opportunities and challenges.

three The way to break the situation: innovation and transformation

In the face of high inventory pressure, industrial upgrading is imperative. Textile enterprises need to speed up intelligent transformation and improve product added value. Develop high-end products such as functional textiles and environment-friendly fabrics to open up new market space. At the same time, strengthen the coordination of the industrial chain to optimize the whole process from cotton planting to end products.

Developing emerging markets is an important way to resolve inventory. Countries along the Belt and Road are becoming new growth points, and the urbanization process of these regions has brought huge demand for textiles. Enterprises need to adjust their market strategies and deepen their efforts in emerging markets.

The domestic cotton industry is in a critical period of transformation and upgrading. High inventory is both a challenge and an opportunity. It forces enterprises to speed up innovation and promote the transformation of industries to high-quality development. Through technological innovation, market development and industrial chain optimization, China's cotton industry is expected to occupy a more favorable position in global competition. World Service believes that the way out in the future is to embrace change, actively adapt to the new market environment, and create a new situation in the changing situation.