As we move towards 2025, global cotton production will be influenced by factors such as macroeconomic dynamics and fluctuations in world supply. The sector faces both challenges and opportunities, requiring attention to market trends, demand and international trade. 

In this article, we explore the main factors that will shape the cotton landscape next year, based on recent data and industry projections. Check out the full analysis! 

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Inside global cotton production 

In the global market, the main source of information for agriculture is the United States Department of Agriculture (USDA). On April 14, the institution published the report “Cotton and Wool Outlook: April 2025” with updated market information . 

The report indicated that world cotton production for the 2024/25 season is projected at 120.0 million bales, up 7% on the previous year. According to the USDA, this growth is driven by increases in planted area in the main producing countries, including the United States, Brazil, China, India and Pakistan.  

Yields are also expected to rise globally this year. The estimate is projected at a record 854 kilograms (kg) per hectare – an increase of 65 kg per hectare compared to last season. Check out the data below: 

Source: USDA 

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According to the projection, cotton production is expected to grow in 2024/25, as increases outweigh declines in some countries. China, Brazil, the United States and Australia are expected to increase production while Pakistan and India reduce it. 

• In China, the forecast is for 32 million bales, recovering 17% compared to the 2023/24 season. Yield is projected at a record 2,402 kg per hectare. 
• For India, cotton production is projected at 25 million bales, about 2% down on last season. 
• In Pakistan, the data indicates a production of 5.0 million bales, down 2 million on the previous year. 
• A significant increase in cotton production is expected in Brazil. The forecast is for 17 million bales, 2.4 million more than in 2023/24.  

Cotton demand and supply 

Despite the growth in production, global demand for cotton has not advanced at the same pace, resulting in an imbalance between supply and consumption. According to the USDA, global cotton use by the textile industries is estimated at 116 million bales for 2024/25, below the 120 million bales estimated for production. 

This figure is down 520,000 bales from the March forecast – mainly due to lower projected use by China. With Trump’s current tariffs on the Asian country, China’s use of cotton mills is expected to decrease. 

This volatility between supply and demand results in higher global ending stocks. The data projects 78.9 million bales, a 7% increase on the previous season. However, the organization also indicates that global economic growth should stabilize, increasing demand for cotton mills in 2024/25. 

Among the main consumers, China and India remain at the top of the ranking. Both countries will account for 54% of global mill use in 2024/25. See below: 

Source: USDA 

On the demand side, the graph shows a decline in world trade. Among the factors highlighted are the decline in Chinese imports and the increase in the country’s own production. 

• The reduction in global trade is forecast at 5% below 2023/2024. 
• Bangladesh is expected to be the main importer of cotton. The country’s imports are expected to increase by 8% to 8.2 million bales. 
• Vietnam and Pakistan are also expected to increase their imports. Record levels are forecast for both countries: 7.4 million bales (+12%) for Vietnam and 5.5 million bales (+72%) for Pakistan.  
• In China, however, imports are forecast to fall by more than 50% to just 6.5 million bales.  

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Brazil and the United States are the world’s largest exporters of cotton. 

Brazil and the United States are the largest global exporters of cotton. According to the USDA, the South American country should account for more than 30% of exports this season. Meanwhile, exports are forecast to fall by 7% in America, reaching 10.9 million bales or 26% of global trade. Competition with Brazil caused this decrease and should keep American exports at their lowest level since 2015/16.  

Last year, Brazil took first place as the world’s largest exporter. This season, the record harvest should boost the country’s exports even more, increasing them by almost 5% compared to last season. 

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Challenges and expectations for cotton in 2025 

According to Cepea (Center for Advanced Studies in Applied Economics), prices in Brazil may be pressured by the greater supply. The organization also reports that world production is growing more than demand. In addition, advances in costs are outweighing increases in sales prices for the new season. Oil trading at levels below those recorded a year ago is also a factor that favors synthetic fibers over cotton. 

Rising global stocks and weakened demand put pressure on prices. In the United States, ending stocks for 2024/25 are projected at 5 million bales, an increase of 1.85 million bales this season. In Brazil, stocks are expected to grow and reach 3.9 million bales.  

With this behavior in stocks, the world price of cotton 2024/25 is expected to fall for the third consecutive season, to an average close to 80 cents per pound, according to the USDA in its March report. It is worth noting that this world price is not the same as the prices traded on the New York Stock Exchange – it is a global average estimated by the institution based on prices around the world. 

Source: USDA

The importance of hedging in this volatile scenario 

Given this scenario of volatility in the cotton market in 2025, financial risk management becomes essential for producers, traders and the textile industry. Price fluctuations, mainly influenced by high supply, increase the importance of hedging.  

Hedgepoint offers a range of products to help you manage your market risk. Contact us and talk to a specialist! 

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