A softer demand outlook led by weaker buying from China is expected to weigh on cotton output next season, pushing global supply closer to equilibrium after a period of surplus. The latest ICAC update points to a 4% drop in production for 2026/27, even as usage remains broadly stable.

In its March edition of Cotton This Month, the International Cotton Advisory Committee sets the global cotton production forecast for the 2026/27 season at 24.8m tonnes, down from the prior year. By contrast, consumption is projected to hold relatively steady at 25.0m tonnes, implying a tighter balance between supply and demand compared with 2025/26, when production is expected to exceed consumption.

ICAC attributes the projected output decline to a combination of factors: lower cotton prices, changing planting intentions across key producing regions, and demand softness most notably in China. While China’s cotton demand is expected to ease, the country is still forecast to remain the world’s largest producer and consumer. The report suggests cotton’s share of China’s fibre mix may continue to slip as manmade fibres capture additional market share.

Beyond China, ICAC highlights the continued influence of major growers including India, Brazil and the United States on overall availability. On the demand side, Bangladesh and Vietnam remain central to import consumption, reflecting their role as major textile and garment manufacturing hubs.

Trade flows are also expected to remain significant. World cotton lint trade for 2026/27 is projected at 9.6m tonnes. Brazil is expected to retain its position as the leading exporter, with the United States in second place.

However, ICAC cautions that policy shifts could add volatility around the global cotton production forecast and trade assumptions. Recent developments including new US tariff measures and updated trade agreements involving Bangladesh, India and the European Union are flagged as additional sources of uncertainty. The organisation notes that the ultimate impact will depend on how the measures are implemented and how markets respond.