Global Perspective: USDA Releases The Global Cotton Supply And Demand Report In May

The US Department of Agriculture released the global cotton supply and demand report in May 2025. This report shows that the cotton output of the United States in 2025/26 will be 3.157 million tons, an increase of 20 thousand tons over the previous year; The export volume of American cotton was 2.722 million tons, an increase of 44000 tons over the previous year; The ending inventory of cotton in the United States was 1.132 million tons, an increase of 87000 tons over the previous year.

The global cotton output was 25.65 million tons, 710000 tons lower than the previous year; The global cotton consumption was 25.708 million tons, an increase of 305 thousand tons over the previous year; The ending inventory of global cotton was 17.065 million tons, down 4000 tons from the previous year.

From the supply and demand adjustment of the old crops in 2024/25, the global cotton output increased by 39000 tons compared with the previous month, the global cotton consumption increased by 144000 tons compared with the previous month, and the global ending inventory decreased by 100000 tons compared with the previous month. After the adjustment, the overall output level is still greater than the consumption level, and the pattern of supply exceeding demand has not changed significantly.

Specifically, according to the judgment of the US Department of Agriculture, due to the good harvest performance in Australia in the early stage, the output is expected to increase slightly. At the same time, although China cancelled some American cotton imports due to tariff game, the continued signing of contracts between Pakistan and Vietnam has made American cotton oversold by 10%. Therefore, American export expectations have been raised and there is still room for upward adjustment. In terms of ending inventory, the increase in Australia offset the decrease in American cotton, and the decrease in global ending inventory was mainly caused by the decrease in China's imports.

From the supply and demand adjustment of new crops in 2025/26, the global cotton output is 710000 tons lower than that of the previous year, the global cotton consumption is 305000 tons higher than that of the previous year, and the global ending inventory is 4000 tons lower than that of the previous year. After the adjustment, the overall output level is slightly less than the consumption level, and the supply and demand are basically balanced.

Specifically, according to the judgment of the U.S. Department of Agriculture, China's per unit yield is expected to be lower than the highest level last year, resulting in a decline of 653000 tons. At the same time, due to the low price of cotton, the United States and Australia and other countries are expected to reduce the cotton planting area. Brazil still maintains record production levels.

In terms of consumption, excluding the reduction of 109000 tons in China, India, Bangladesh, Turkey, Vietnam and other countries have all increased. In terms of import and export trade, only Pakistan's import volume is expected to decline over the previous year, while Brazil and the United States' export volume have significantly increased over the previous year. In terms of ending inventory, the cumulative amount of Brazil and the United States basically offset the decrease of China and Australia, with a small change compared with the previous year.

Comparing the results of this report with the estimates of the Agricultural Outlook Forum, the global output has increased while the global consumption has decreased. Therefore, compared with the tight balance estimates of the Agricultural Outlook Forum, the basic balance of supply and demand in 2025/26 in this report is slightly empty.

At the same time, the judgment of the U.S. Department of Agriculture on the decline of China's ending inventory in 2025/26 is contrary to the judgment of domestic institutions. Combined with the increase of ending inventory in Brazil and the United States, the inventory of major producing countries in the world is still dominated by the upward trend, which also makes the report result slightly empty. In addition, the US Department of Agriculture has raised global cotton consumption for two consecutive years, which may not be sufficient to judge the impact of the anti globalization trend in some countries, and needs follow-up observation.