Global cotton trade is expected to rebound in the coming season as India and China emerge as the key engines of import demand, according to the July 2026 issue of Cotton This Month published by the International Cotton Advisory Committee (ICAC).
The report points to a changing cotton market in which consumption and trade are projected to strengthen despite a modest decline in global production in 2026/27. While cotton output is expected to ease after a stronger 2025/26 season, rising import demand from Asia’s two largest textile producers is set to support international trade flows and reshape supplier dynamics.
Global cotton production to dip in 2026/27 as consumption rises
According to ICAC, global cotton production for the 2025/26 season is estimated at 26.5 million tonnes, up 3 per cent from the previous season. Cotton consumption is projected at 25.3 million tonnes, representing a 1.6 per cent increase year on year.
Looking ahead to the 2026/27 season, ICAC forecasts a 2 per cent decline in global production to 25.9 million tonnes, while consumption is expected to continue rising by around 1 per cent to 25.5 million tonnes. On the back of this tightening balance, global cotton trade is projected to increase by 2.6 per cent to 9.6 million tonnes.
The report says the market is being shaped by several overlapping trends, including improving demand for cotton consumption, pressure on acreage due to lower grower profitability, rising input costs, and increasing climate-related risks such as heat stress, erratic rainfall and pest attacks.
India emerges as a major driver of cotton imports
One of the most significant shifts in the global cotton market is India’s growing role as an import destination. ICAC projects India’s cotton lint imports to reach around 1 million tonnes in 2025/26, a 42 per cent increase over the previous season and the highest level ever recorded by the country.
The jump in imports follows a series of policy measures aimed at improving fibre availability for the domestic textile industry. These include temporary cuts in import duties and duty exemptions for extra-long staple cotton, which have made imported fibre more competitive and helped support mill demand.
India’s rising import appetite underlines the pressure on domestic cotton supply as the country’s spinning and textile industry seeks to secure adequate raw material in a competitive and cost-sensitive market.
China’s cotton import demand rebounds sharply
China is also expected to reassert itself in the global cotton trade. After posting an eight-year low in imports in the previous season, China’s cotton lint imports are projected to increase by around 42 per cent in 2025/26.
ICAC expects China to regain its position as the world’s largest cotton importer in 2026/27, accounting for approximately 19 per cent of global cotton imports. The rebound is being driven by additional import quotas, stronger domestic cotton prices and the need to maintain mill consumption.
China’s import recovery is likely to have major implications for global supplier countries, especially as trade relationships continue to evolve.
Brazil strengthens position in China’s cotton supply chain
The report highlights a major shift in sourcing patterns, with Brazil consolidating its position as China’s largest cotton supplier. Brazil currently accounts for around 52 per cent of China’s cotton imports, making it the dominant player in one of the world’s most important cotton trade corridors.
Australia has emerged as China’s second-largest supplier, while U.S.-China trade relations continue to influence competitiveness and trade flows. ICAC notes that recent policy developments, including China’s suspension of tariffs introduced since March 2025 and new commitments to purchase U.S. agricultural products, could further affect sourcing patterns in the months ahead.
Cotton acreage remains under pressure
Despite the expected recovery in trade, cotton production remains under pressure in many producing countries. The report notes that growers continue to face weaker profitability, higher production costs and competition from alternative crops, all of which are weighing on planting decisions.
At the same time, climate volatility remains a key challenge for the sector. Unreliable rainfall, rising temperatures and increasing pest pressures are affecting yield prospects and influencing farm-level decisions across several major producing regions.
US launches Great American Cotton Plan
The July issue also draws attention to the Great American Cotton Plan, recently launched by the U.S. Department of Agriculture (USDA). The initiative is designed to boost domestic demand for American-grown cotton and cotton products, strengthen the cotton value chain and improve grower returns.
A central element of the programme is the “Plant Not Plastic” campaign, which promotes cotton-based products as more sustainable alternatives to synthetic fibres. The plan also includes support for the proposed Buying American Cotton Act, aimed at encouraging greater use of domestic cotton across U.S. supply chains.
ICAC projects Cotlook A Index at 66–85 cents/lb
Based on current supply and demand expectations, the ICAC Secretariat forecasts the Cotlook A Index for the 2026/27 season to range between 66 and 85 US cents per pound, with a midpoint estimate of 75.7 cents per pound.
The report was authored by Parkhi Vats, Principal Statistician & Data Architect at ICAC. The next edition of Cotton This Month is scheduled for release on 1 August 2026.
With India and China poised to lift import demand and global trade expected to recover, the cotton market is entering a new phase where policy support, climate resilience and shifting sourcing patterns will play a decisive role in shaping the season ahead.