Cotton prices across most benchmarks declined over the past month, reflecting ongoing uncertainty in global markets. n nDue to the U.S. government shutdown beginning October 1, many official reports on supply, demand, and trade have been delayed, including key data typically featured in this publication. Despite this gap, general market conditions can still be assessed. Harvesting is progressing in several major Northern Hemisphere producers. n nIn China, recent rainfall during the open boll stage has raised concerns about fiber quality, though overall weather conditions have supported a strong season. Both Chinese authorities and the U.S. Department of Agriculture (USDA) have revised their production forecasts upward in recent months. n nIndia has experienced heavier-than-average monsoon rains, prompting worries about yield and quality. The Cotton Corporation of India (CCI) is preparing for another round of domestic purchases. With the minimum support price (MSP) increased and market prices remaining weak, CCI is expected to play a major role in absorbing surplus cotton this season. n nPakistan’s crop has also been affected by excessive rainfall, with flooding damaging some output and broader precipitation impacting fiber integrity. n nIn the United States, harvesting is underway under mostly dry conditions favorable for picking, despite some localized rain. n nThe absence of updated U.S. data complicates analysis of the factors that recently pushed NY/ICE futures below their 2025 trading range. Prior to the shutdown, U.S. export commitments were down approximately 15 percent year-over-year through September 19. Sales performance varied by region: gains were seen in Vietnam, Bangladesh, and Indonesia, while shipments to China, Pakistan, Turkey, and Mexico declined. Notably, since China imposed higher tariffs on U.S. cotton in March, net sales to China have slightly dipped into negative territory (-3,000 bales per week), with cancellations slightly exceeding new orders. n nDownstream demand remains uncertain due to unresolved trade policies. Next month, the U.S. Supreme Court will begin hearing arguments on the legality of 2025 tariff increases. Central to the debate is the International Emergency Economic Powers Act (IEEPA), enacted in 1977, which has been cited in multiple executive orders on tariffs. However, several lower courts have ruled that IEEPA does not authorize broad presidential authority to adjust tariff rates. A decision is not expected for several months, leaving retailers and brands to navigate cost management decisions in the interim. The administration may pursue alternative legal justifications if IEEPA is invalidated. n nThe Organization for Economic Cooperation and Development (OECD) recently revised its global GDP growth forecast upward by 0.3 percentage points to 3.2 percent for 2025, up from 2.9 percent. Growth was 3.3 percent in 2024. For 2026, the full impact of trade policy shifts is expected, with world GDP projected to slow to 2.9 percent. U.S. growth is forecast to decline from 2.8 percent in 2024 to 1.8 percent in 2025 and 1.5 percent in 2026. Euro Area expansion remains modest (0.8 percent in 2024, 1.2 percent in 2025, 1.0 percent in 2026), while China’s economy is expected to ease from 5.0 percent to 4.9 percent in 2025 and 4.4 percent in 2026. n nIf these projections hold, weaker economic growth in major consumer markets could dampen apparel demand later in the crop year. However, a potential counterbalance is the stabilization of clothing inventories after years of reduction, particularly in the U.S. How these dynamics interact under ongoing policy ambiguity will likely shape demand for cotton in the months ahead. n nJon Devine, senior economist at Cotton Incorporated, provides regular market assessments to stakeholders in textiles and investment, analyzing supply chain trends and consumer behavior relevant to the cotton and apparel industries. n
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Monthly Cotton Economic Newsletter: October 2025
Recent Price Movement n nMost cotton benchmarks decreased over the past month. n nSupply, Demand & Trade n nThe U.S. government entered a shutdown on Oct. 1. One consequence is that many economic reporting functions have been delayed. This includes the global supply, demand and trade estimates that are a feature of this publication. n nIn the absence of October updates, it is possible to generally address conditions in the cotton market. Harvesting has gotten underway in several major Northern Hemisphere countries. n nIn China, there has been rain recently on open bolls and there have been some concerns about potential effects on quality. However, weather has been generally cooperative this year, and both Chinese agencies and the USDA have adjusted production forecasts higher throughout the season. n nIn India, the monsoon has been heavier than usual and has generated some concern over quality and yield. The Cotton Corporation of India (CCI) is preparing for another round of purchases. A rise in India’s minimum support price (MSP) coupled with weak market prices suggest that CCI will be a significant buyer of domestic cotton this crop year. n nThe Pakistani crop has also suffered from excessive rainfall, with flooding taking out some production and precipitation affecting quality more broadly. n nIn the U.S., harvesting is underway. There has been some rainfall, but generally dry conditions have supported picking. n nPrice Outlook n nWith the pause in reporting from the U.S., it is more of a challenge to understand the influences that finally pushed NY/ICE futures below the range that had held them for the 2025 calendar year. n nIn the latest data available before the shutdown, U.S. export commitment was reported to be down about 15 percent crop-year-to-date through Sept. 19. Purchases across market were mixed, with higher sales to certain locations (including Vietnam, Bangladesh and Indonesia) and down to others (China, Pakistan, Turkey and Mexico). Although there was some buying early this crop year, since China increased tariffs on U.S. cotton in March, net U.S. sales to China have been slightly negative (-3,000 bales/week, with slightly more cancelations than new sales). n nThe downstream environment remains clouded by policy uncertainty. Early next month, the U.S. Supreme Court will begin hearing arguments about the legality of many of the tariff increases that were implemented in 2025. At the center of the debate is the legal justification that has been commonly applied. Congress was granted authority to manage foreign trade in the U.S. Constitution. However, Congress has passed legislation delegating that power to the president over time. n nThe International Emergency Economic Powers Act (IEEPA) is a piece of legislation that was passed by Congress in 1977 that is an example of the sharing of the power to manage trade between the legislative and executive branches of government. IEEPA was cited in many of the Executive Orders involving tariffs this year. However, several courts have found that IEEPA does not grant the president the broad ability to change tariff rates. n nWhile proceedings are set to begin in November, it is expected that it will take several months until the Supreme Court could issue a ruling. If IEEPA is not found to be a valid justification for tariffs, refunds are a possibility that has been raised. It is also possible for the administration to pursue tariff justifications other than IEEPA. Until a ruling is made, U.S. retailers and brands continue to face the choice of how to allocate orders to manage costs. n nThe Organization for Economic Cooperation and Development (OECD) recently issued an updated set of projections for global growth. In September, the OECD estimate for global GDP growth was increased +0.3 points to 3.2 percent for 2025 (previous forecast for 2025 was 2.9 percent, growth was 3.3 percent in 2024). In 2026, the full impact of changes in trade policies is expected to be more fully registered, and world GDP growth is anticipated to slow to 2.9 percent. U.S. economic growth is forecast to slow (from 2.8 percent in 2024, to 1.8 percent in 2025, and 1.5 percent in 2026), Euro Area growth is forecast to remain sluggish (0.8 percent in 2024, 1.2 percent in 2025, and 1.0 percent in 2026), and China’s growth is forecast to decelerate (5.0 percent in 2024, 4.9 percent in 2025, and 4.4 percent in 2026). n nIf these projections are realized, slowing economic growth in major consumer markets could prove a headwind for downstream demand later in the crop year. An offsetting factor could be apparel inventory stabilization after a period of drawdown over the past couple years (notably the U.S.). How these influences balance in an environment of policy uncertainty can be expected to shape the demand situation through the remainder of the crop year. n nJon Devine, senior economist at Cotton Incorporated, keeps key stakeholders in the textile and investment communities informed via timely market analyses of commodity economics and factors influencing their stability. He generates industry analyses of the various links on the cotton supply chain, contributing to the division’s examinations and reports on consumer and retail trends relevant to cotton textile and apparel sectors.