Global cotton prices have been declining amidst rising exports from the leading producers
![Cotton prices](https://adminportal.procurementresource.com/newsarticles/files/895078b9-6fd3-47d3-aab1-2f101e000dbccotton-prices.webp)
Cotton prices have plummeted due to increased production from the world's leading producers, particularly Brazil, which has surpassed the United States as the top cotton exporter.
Brazil's cotton exports reached 12.4 million bales in the 2023-24 season, compared to the 11.8 million from the United States, as estimated by the US Department of Agriculture. Australia, ranking third in exports, shipped 5.8 million bales. The increase in Brazilian production has been attributed to a significant expansion in cotton acreage over the past decade, with 1.87 million hectares planted in the 2023-2024 season, a 13% increase from the previous year.
The shift towards cotton in Brazil's Mato Grosso state has been influenced by declining corn prices over the last two years, prompting farmers to opt for cotton over a second corn crop. As per sources, Brazil's lack of subsidies forces producers to maximize yield per hectare, with Brazil producing almost 2 tonnes of lint per hectare.
Despite a reduction in US cotton production due to consecutive years of drought, which brought production down from 17.5 million bales to 12.5 million bales in two years, global cotton prices have continued to fall. This drop in US production and a decrease in global demand for cotton since the coronavirus pandemic, compounded by economic slowdowns and rising interest rates, have pressured prices further.
The market has also seen a shift towards cheaper, petroleum-based fabrics like polyester, which are quicker to produce but carry a larger environmental footprint. The influence of computer-driven hedge funds, which capitalize on market trends, has also been noted as a factor in the fluctuating cotton prices.
Concerns about the environmental and social impacts of cotton farming in Brazil have been raised, but Alexandre Schenkel, president of the Brazilian Cotton Producers Association, has defended the industry's sustainability practices, emphasizing that cotton farming in Brazil does not lead to new deforestation.
Read More About Cotton Production Cost Reports - Get Free Sample Copy in PDF
Looking ahead, Dr. Jody Campiche from the National Cotton Council of America suggested that US cotton production might see better results in upcoming harvests, but any significant price recovery is unlikely unless global cotton demand increases.