OECD‑FAO Agricultural Outlook 2025‑2034

9. Cotton

Abstract

This chapter describes market developments and medium-term projections for world cotton markets for the period 2025-34. Projections cover consumption, production, trade and prices for cotton. The chapter concludes with a discussion of key risks and uncertainties which could have implications for world cotton markets over the next decade.

9.1. Projection highlights

Global use of raw cotton is projected to grow by 1.2% annually, driven by increasing textile demand in middle- and low-income countries. Asia will remain the primary hub for the processing of raw cotton, with expansion in Viet Nam, Bangladesh, and India fuelled by competitive labour and production costs. The People’s Republic of China (hereafter “China”) is expected to gradually lose its dominance in global cotton processing but it will remain the world’s largest cotton processor by 2034, followed by India.

Global cotton production is expected to grow by 1.3% annually, primarily driven by yield improvements, reaching 29.5 Mt by 2034. Innovations in genetics and farming practices are also expected to help reduce the sector’s carbon footprint. The faster growing production result in an expected increase in cotton stocks over the Outlook period which declined over the last ten years.

India is projected to surpass China as the world’s largest cotton producer, as it is expected that India will considerably increase cotton yields from their current low levels. Brazil and the United States will follow at similar levels of production.

Global cotton trade is projected to grow steadily at 1.6% annually, reaching 12.3 Mt by 2034. While China is projected to remain the largest importer with about 3 Mt, the increase in global trade will be driven by rising imports into other Asian countries, particularly Bangladesh and Viet Nam, due to their limited domestic production capacity.

As major producers and exporters, Brazil and the United States are expected to meet the growing demand from Asian countries and will be the two largest exporters over the next decade.

International cotton prices are expected to decline slightly in real terms over the Outlook period, driven by competition from synthetic fibres and productivity gains in cotton farming.

A number of uncertainties could alter cotton market projections, altered macro-economic conditions and unforeseen shifts of consumer preferences toward sustainability, organic cotton, recycling and second-hand clothing. On the supply side, projections are subject to yield uncertainty related to systematic changes in growing conditions due to weather shifts, water availability, or pest infestations.

9.2. Current market trends

9.2.1. Global cotton production to recover sharply in 2024/25

Global cotton production in the 2024/25 (August/July) season is set to rebound after two consecutive annual declines, reaching its highest level in the past four seasons. The year-on-year increase is mainly driven by expectations of larger outputs in key producing countries. In China, generally favourable weather conditions benefitted crop yields, which are projected to recover sharply from the reduced level in 2023/24 and boost output. In Brazil and the United States, production growth is expected to result from an expansion in area, at the expense of competing crops like maize. These production gains are forecast to more than offset a likely decline in India, the world’s second largest cotton producing country, due to a shift in area to more remunerative crops, including rice and pulses. Similarly, a reduction in area is expected to drive a production decline in Pakistan, while output is set to rebound for the second consecutive season in West African countries, following the drop in 2022/23 caused by a significant Jassids infestation.

Global cotton consumption in 2024/25 is forecast to increase slightly for a second consecutive year, recovering from a large contraction in 2022/23. The year‑on‑year increase is mainly driven by forecasts of higher cotton use in India, Bangladesh, Türkiye, and Viet Nam, offsetting a significant decline in Pakistan driven by the decline in output. In China, the largest cotton-spinning country in the world with mill use accounting for nearly a third of global consumption, cotton demand is projected at the 2023/24 level, reflecting the country’s slow economic growth which constraints domestic demand growth for textile and apparel products.

International cotton prices have generally trended downwards since the second quarter of 2024, mainly pressured by strong production prospects for the 2024/25 season. Weaker global demand for textile and apparel and high stock levels have also contributed to the decline. Although global consumption is showing signs of recovery, production is forecast to exceed consumption in the current season, weighing on prices. Additionally, cotton continues to face stiff competition from man-made fibres (MMFs) – which are cheaper but less sustainable and derived from non-renewable resources.

World trade of raw cotton in 2024/25 is foreseen to remain close to its level in the previous season. On the supply side, Brazil is expected to surpass the United States as the world’s largest cotton exporter for the second consecutive season, with rising shipments likely to offset the continued decline in United States exports. A significant increase in exports is also forecast from West African countries, supported by expectations of a larger crop. On the demand side, the sharp drop in imports anticipated in China, the world’s largest importer, is forecast to be offset by a strong increase in purchases by Bangladesh, Viet Nam and Türkiye.

9.3. Market projections

9.3.1. Consumption

A moderate mill use growth is expected, mostly driven by the continued expansion of the Viet Nam and Bangladesh milling industry

Cotton consumption refers to the use of cotton fibres by mills to transform it into yarn. Cotton mill-use depends largely on two major drivers: global textile demand and competition from synthetic fibres. Over the past decades, global demand for textiles fibres has increased sharply, driven mainly by population and income growth, particularly in low‑and middle-income countries. However, this expanding demand has been largely supplied by chemical fibres (Figure 9.1, left panel). The versatility of synthetic fibres and their competitive prices have encouraged the textile manufacturing industry to favour synthetic over cotton fibres. From the early 1990’s, non-cotton fibres have gained solid ground in the textile industry. In 2024, the end-use market-share reached 77.6% for chemical fibres and only 22.4% for cotton. Likewise, per capita consumption of non‑cotton fibres has strongly outpaced per capita consumption of cotton fibres and continues to increase strongly. In contrast, per capita consumption of cotton has remained stagnant over time and trended downwards in recent years (Figure 9.1, right panel).

The prospects for global cotton use rely mainly on its evolution in developing and emerging economies. Demand from these regions with lower absolute levels of consumption but higher income responsiveness is projected to exert upward pressure on global demand for cotton as the incomes and population of these countries are projected to increase. Global mill use is projected to grow by around 1.2% p.a. over the next decade, a moderate increase due to the slowdown in global economic prospects negatively affecting the demand for textiles.

The geographical distribution of demand for cotton fibres depends on the location of spinning mills, where natural and synthetic fibres are transformed into yarn. Traditionally, the spun yarn industry has been established predominantly in Asian countries, where conditions such as lower labour costs are favourable for the industry. China has been the world’s leading cotton consumer since 1960.

Higher labour costs and more stringent labour and environmental regulations led to a gradual decrease in China’s cotton mill consumption since 2010. This decline was further exacerbated by the abolishing of the support price system in 2014. This contributed to a move to other Asian countries, notably Viet Nam and Bangladesh. While this trend is expected to persist over the decade, China is projected to retain its position as the world’s largest cotton processing country.

In India, the world’s second largest cotton processing country, the growing textile industry, supported by various government initiatives and foreign direct investment (FDI) inflows, is expected to result in continuous growth in cotton mill use, as the country's textile industry is predominantly cotton based.

Since the phase-out in 2005 of the Multi-Fibre Arrangement, which imposed fixed bilateral quotas on developing country imports into Europe and the United States, countries such as Bangladesh and Viet Nam have experienced strong growth of their textile industry based on an abundant labour force, low production costs, and government support measures. In the case of Viet Nam, this was supported by its accession to the World Trade Organization in 2007 and by FDI, notably by Chinese entrepreneurs. In addition, Free Trade Agreements (FTAs) including the ASEAN-China Free Trade Agreement (2004), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, 2018) and the EU-Viet Nam Free Trade Agreement (EVFTA, 2020) have facilitated greater market access to textile exports from Viet Nam. Similarly, in Bangladesh, foreign investments and FTAs, including Bangladesh’s duty-free access to the European Union under the Generalized System of Preferences (GSP) and duty‑free access to China since 2020, have boosted the country’s textile industry, contributing to its emergence as a major global exporter of apparel, particularly knitted and woven garments. The expansion of textiles industries in Asian economies is expected to continue to boost mill consumption growth over the coming decade. Viet Nam will take the lead in annual growth of mill use at 2.7% p.a., followed by Bangladesh at 2.1% p.a. Nevertheless, China is expected to remain the largest cotton processing country in 2034 followed by India with consumption projected to grow by 0.3% and 1.3% p.a. respectively over the next decade.

9.3.2. Production

Global production to grow with improved yields from technological advancements in genetics, precision agriculture, and sustainable practices

Cotton is grown in subtropical and seasonally dry tropical areas in both the northern and southern hemispheres, although most of the world’s production takes place north of the equator. The leading producing countries are India, China, Brazil, and the United States. Jointly, these countries are expected to account for around 76% of global output in 2034 (Figure 9.3).

Global production of cotton is expected to grow steadily and reach 29.5 Mt by 2034, 20% higher than in the base period. The foreseen increase will mostly come from growth in the main cotton producers: India will account for about 30% of the global increase, followed by Brazil (27%), and the United States (23%). Overall, gains in cotton production are predominantly driven by higher yields, and to a lesser extent, on expansion in area harvested.

Average global yields are projected to increase by 15% compared to the base period. Factors such as improvements in genetics, better agricultural practices, and digitalization supporting precision agriculture will contribute significantly to enhancing productivity and sustainability. In particular, smart irrigation systems can reduce water usage and energy consumption (MIT Office of Sustainability, 2023[1]). The use of sensors and GPS technology for fertiliser application ensures that crops receive the right amount of nutrients needed (International Fertilizer Association, 2019[2]). Additionally, drones and satellite imagery provide real-time monitoring of crop health, enabling more efficient application of water, fertilisers, and pesticides (Bhagwati Prasad, 2024[3]). Transitioning from traditional diesel-powered harvesters to electric or hybrid models can further reduce emissions and enhance sustainability during the harvesting process. Finally, the development and adoption of drought-resistant cotton varieties can reduce the reliance on irrigation. Similarly, genetically modified cotton varieties, which offer greater resistance to pests like bollworms, can reduce the need for chemical pesticides, contributing to more sustainable agricultural practices.

The yield gap between main producers in 2024 is projected to remain constant over the Outlook period. By 2034, yields in China and Brazil are projected to remain more than double the current world average yield of 0.8 t/ha, while in India, the largest cotton producer, yields are expected to continue below it. (Figure 9.4, left panel). Cotton area is projected to expand by 4% compared to the base period, with the highest growth occurring in Brazil (+34% compared to the base period) where the prospect of increasing exports encourages producers to invest in increasing the planted area.

Production in India is projected to grow by around 2% p.a. over the next decade, mainly on account of yield improvements rather than area expansion, since cotton already competes for land with other crops, such as soybeans and pulses. Raw cotton productivity has remained stagnant in recent years and is among the lowest globally. Cotton is traditionally grown on small farms, which limits the adoption of intensive farming technologies. Furthermore, farmers in India allocate more row space between plants to accommodate the passage of a bullock and cultivator for weed control purposes, reducing plant density and overall yield potential. To address this, researchers are promoting high‑density planting systems, which involve closer plant spacing to maximize yields and enable mechanised harvesting. Pest-resistant genetically modified (GM) cotton, including Bt cotton, has also helped reduce pest-related yield losses and dependency on chemical pesticides, leading to increased productivity and cost savings. Meanwhile, drought-tolerant cotton varieties, developed through conventional breeding, are also being promoted to sustain yields in water-stressed regions. Federal and state government agencies, along with research institutions, are actively engaged in cotton varietal development and integrated pest management to enhance productivity in the sector. Based on these considerations, the Outlook assumes a high yield growth potential at 1.7% p.a. over the next decade, enabling India to surpass China as the world’s largest cotton producer by 2034.

Chinese cotton is currently produced with the highest global yield (2.1 t/ha average in 2022-24), which is more than double the world’s average. Over the past two decades, the cotton area in China has been declining, mostly due to changing government policies. Nevertheless, this trend seems to have slowed down since 2016. It is expected that the cotton area will decrease by 0.4% p.a. during the Outlook period, against a 2% decline in the past decade, while cotton production is expected to remain stable thanks to consistently higher yields.

In Brazil, cotton is grown in part as a second crop in rotation with soybeans or maize. Recently, output has strongly grown in the main cultivation areas such as Mato Grosso, where 72% of Brazilian cotton is currently harvested. Cotton output is foreseen to increase by 1.5% p.a. Production gains are mostly coming from higher yields due to the increased use of genetically engineered (GE) seeds and fertilisers. Recent investments in cotton-growing capacity and the acquisition of new equipment (planters, pickers, and ginning capacity) are expected to boost production in the coming years. Due to strong competition with other crops, mainly soybeans for second crop, the planted area depends significantly on the profitability of cotton compared to other commodities.

Sustainability issues play an important role and will impact cotton markets in the medium-term. In a context of growing concerns over the effects of extreme weather events and socio-environmental considerations, new initiatives have been introduced to promote sustainability along the supply chain. In the season 2022/23, the market share of virgin cotton covered by programmes recognised by the 2025 Sustainable Cotton Challenge (Textile Exchange, 2024[4]) reached 29% of global cotton production (Figure 9.5). Among the existing standards, Better Cotton, a not-for-profit organisation, dominates globally at around 22% of all cotton in the season 2022/23. Alternative strategies promote better agricultural practices to reduce GHG emissions and provide guidance to textile brands and retailers to source their cotton inputs from recognised and certified sustainable producers. It is expected that demand for more sustainable cotton will continue to rise, driven by commitments from brands and awareness among young populations. Therefore, growing trends towards consumption of more sustainable cotton products will likely boost cotton production in countries such as Brazil, where the entire cotton output already complies with the sustainability standards. In India and Pakistan, cotton programmes accounted for 28% and 40% of total cotton production in 2022/23, respectively. It is expected that the Sub‑Saharan region will also benefit from higher compliance with sustainability standards, with programmes such as Cotton Made in Africa (CMIA) playing a key role. However, its equivalency agreement with Better Cotton ended in December 2022 and in November 2023 the Regenerative Cotton Standard (RCS) was launched to further promote sustainability. While RCS is still in its early stages, CMIA remains a major contributor to sustainable cotton in the region.

The share of organic cotton in world cotton production has only exceeded 1% since 2021/22 and accounted for 3.2% of world cotton production in season 2022/2023, suggesting a growing demand in the next decade.

9.3.3. Trade

Viet Nam and Bangladesh will drive trade growth over the next decade

World cotton trade is projected to expand steadily over the next decade by 1.6% p.a. and reach 12.3 Mt in 2034. This growth is driven by the increasing demand for textiles in Asian countries, particularly Viet Nam and Bangladesh, where mill use is expanding rapidly. Meanwhile, China is projected to maintain nearly fixed import levels of 2.9 Mt (Figure 9.6, right panel) and remain the world’s largest importer. Growth in raw cotton imports is projected to be strong in Viet Nam and Bangladesh (+2.8% p.a. and +2.4% p.a. respectively).

The United States and Brazil will compete closely as the world’s largest exporters of raw cotton in 2034. Exports from the United States have decreased in recent years due to extreme weather conditions affecting production, and Brazil took over as the world’s largest cotton lint exporter in the 2023/24 season. By 2034, the United States and Brazil are projected to account for nearly equal shares of global cotton exports, at approximately 30% each.

Brazilian exports are expected to grow strongly over the next decade, benefitting from major investment in improving its port infrastructure and logistics capabilities. As a result, raw cotton exports are expected to increase by 2.6% p.a. reaching 3.6 Mt by 2034, roughly level with the United States. Sub-Saharan Africa as a whole, where cotton is an essential export crop, follows behind (Figure 9.3) with 14% of global exports in 2034.

Sub-Saharan African exports are projected to continue growing at around 1.1% p.a. in the coming decade, representing more than 80% of its production (Figure 9.6 left panel), with South and Southeast Asia being the major export destinations. However, the textile and apparel industry is expanding in countries such as Ethiopia and Benin, supported by FDI flows and government investments. Access to preferential trade agreements, including the European Union’s Generalized Scheme of Preferences (GSP), further supports the industry's growth in these countries. In the long run, the increase in mill use may affect the net export status of Sub-Saharan Africa.

9.3.4. Prices

International cotton prices to decline in real terms over the medium-term

International cotton prices in real terms are projected to trend slightly downward in the medium term (Figure 9.7). Prices will continue to be influenced by competition from man-made fibres along with changes in consumers preferences and productivity gains.

From the early 1970s, when polyester became price-competitive, cotton prices tended to follow polyester prices. For example, cotton prices were only 6% above polyester staple fibre prices between 1972 and 2009. Since 2010, however, cotton prices have been on average around 77% above the polyester price and around 100% in more recent years, in nominal terms.

9.4. Risks and uncertainties

Regulatory shifts and innovation as key challenges shaping the cotton sector

Key drivers of per capita textile demand in emerging economies, notably economic expansion and urbanisation, will continue to exert substantial influence on cotton fibre demand. Additional demand trends affecting projections encompass the growing adoption of recycling in the textile sector. Notably, recycled cotton, which had an estimated production of 0.3 Mt in 2023 compared to 24 Mt of newly produced cotton, is expected to experience significant growth in the coming years (Textile Exchange, 2024[4]).1 In particular, pre-consumer cotton waste from garment and fabric mills presents a significant opportunity for more efficient recycling, contributing to a lower carbon footprint for the textile sector. Moreover, increased competition from synthetic fibres and evolving consumer preferences towards athleisure apparel present significant hurdles to cotton demand. However, the adoption of sustainability norms offers potential stimulation to cotton demand amid mounting environmental concerns.

Harvest losses, due to pest infestations and weather variations, and supply chain disruptions, such as transportation bottlenecks or trade restrictions, can also negatively affect cotton production and limit market availability.

Regulatory frameworks promoting sustainability, traceability, and labelling standards are reshaping the global cotton landscape, reflecting a growing consumer preference for eco-friendly products. Policies such as the Ecodesign for Sustainable Products Regulation (ESPR), the Product Environmental Footprint (PEF) and the Strategy for Sustainable Circular Textiles in the European Union exemplify initiatives driving this shift. Furthermore, policy measures that affect consumption, such as initiatives by some East African countries to reduce second-hand clothing imports to boost local textile industries, have the potential to bolster cotton consumption and encourage value addition within Africa. However, it is important to ensure that the adoption of these standards benefits smallholder cotton growers by improving their livelihoods.

The transition towards a circular economy, characterised by recycling and the growing second-hand market, presents both challenges and opportunities for the cotton industry. The included assumption of the Outlook is a slow transition. While recycling initiatives hold promise for resource efficiency, they may disrupt traditional supply chains and alter demand patterns for raw cotton. Furthermore, issues associated with social, economic, and environmental sustainability, such as the Strategy for Sustainable Circular Textiles in the European Union, are gaining prominence among consumers, industry stakeholders, and policy makers globally. External factors, including the US‑China dispute and the Uyghur Forced Labor Prevention Act,2 further complicate matters, resulting in disruptions along the supply chain.

References

[3] Bhagwati Prasad, D. (2024), “Fields of tomorrow: Advancements in Modern Agriculture”.

[2] International Fertilizer Association (2019), How Precision Agriculture is Improving Plant Nutrition, https://www.fertilizer.org/wp-content/uploads/2023/01/IFA_2019_Infographic_Precision_Agriculture.pdf.

[1] MIT Office of Sustainability (2023), Smart irrigation technology covers “more crop per drop”, https://sustainability.mit.edu/article/smart-irrigation-technology-covers-more-crop-drop.

[4] Textile Exchange (2024), Materials Market report, https://textileexchange.org/knowledge-center/reports/materials-market-report-2024/.

Notes

← 1.  Please note that the data cited here refers to mechanically recycled cotton only and that chemically recycled cotton is excluded.

← 2.  The Uyghur Forced Labour Prevention Act forbids the import of goods produced in China’s Xianjiang region. The importer must clearly prove that the merchandise coming from this region was not produced with forced labour.