OECD‑FAO Agricultural Outlook 2026‑2035

9. Cotton

Abstract

This chapter describes market developments and medium-term projections for world cotton markets for the period 2026-2035. Projections cover consumption, production, trade and prices for cotton. The chapter concludes with a discussion of the 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 1.6% annually over the next decade, supported by the continued expansion of textile and spinning capacity in Asia, in particular in Bangladesh, India and Viet Nam, which benefit from competitive labour and production costs.

People’s Republic of China (hereafter “China”) will remain the world’s largest cotton processor by 2035, followed by India.

Global cotton production is expected to grow by 1.6% annually, largely as a result of by yield improvements, reaching 30 million tonnes (Mt) by 2035. Faster production growth is expected to lead to an increase in cotton stocks over the Outlook period, reversing the decline observed over the past decade.

China is expected to remain the world’s largest cotton producer, followed by India, where yields are projected to recover from the recent downturn and increase gradually over the Outlook period. Brazil should follow closely behind, thanks to major improvements in productivity.

Global cotton trade is projected to expand steadily at 2.4% per year over the medium term, fuelled by rising import demand in Asia, particularly in Bangladesh and Viet Nam. With limited domestic production capacity and continued growth in mill use, both countries are expected to surpass China as the world’s largest cotton importers.

As Brazil’s role in global cotton production continues to grow, it is expected to remain the largest exporter over the next decade, followed by the United States, with both countries meeting the growing demand from Asian countries.

International cotton prices are expected to decline slightly in real terms over the Outlook period, driven by productivity gains on the supply side and continued competition from synthetic and recycled fibres on the demand side.

A number of uncertainties could alter cotton market projections, changing macroeconomic 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 unexpected shocks and systematic changes in growing conditions due to weather shifts, water availability or pest infestations.

9.2.  Current market trends

Global cotton production to remain above mill use in 2025/2026

Global cotton production in 2025/2026 (August/July) is expected to increase slightly compared with the previous year and exceed global mill use. The year-on-year increase is mainly driven by expectations of larger outputs in key producing countries, particularly China, India and Brazil. Together with the United States and Pakistan, these five countries account for about 79% of global cotton production and play a central role in shaping the global supply balance. In China, higher yields following generally favourable weather conditions during the growing season are projected to boost output, marking a steady recovery after the sharp decline in 2023/2024. Similarly, in India, a recovery in yields is expected to drive an increase in cotton production. In Brazil, production is forecast to rise from the previous year and reach a record level, driven by area expansion and higher yields supported by favourable growing conditions. These production gains are forecast to more than offset production declines in the United States and Australia. Pakistan and West African countries are also expected to record lower production, reflecting reductions in planted area and lower yields.

Global cotton consumption in 2025/2026 is projected to remain relatively subdued amid moderate global demand for textile and apparel products, with lower consumption in China, the largest cotton-spinning country, largely offset by higher mill use in India. Together, China, India, Pakistan, Bangladesh and Türkiye account for about 77% of global cotton mill use, underscoring the importance of developments in these markets for the global cotton outlook. In China, consumption is forecast to be marginally lower than in 2024/2025 amid weaker demand from the export-oriented textile and apparel sector and increasing substitution toward synthetic fibres. Consumption is also expected to decrease in Bangladesh. By contrast, cotton consumption is anticipated to increase in India, supported by sustained demand from the domestic textile industry, while mill use in Pakistan and Viet Nam is projected to remain broadly stable.

International cotton prices have generally trended downward since the beginning of the current season, mainly pressured by favourable global production prospects and ample exportable supplies. Subdued global demand for textile and apparel products, together with higher stock levels, has also contributed to the decline. With global production expected to exceed mill use, ample global supplies have continued to weigh on prices. In addition, cotton continues to compete with man-made fibres, particularly polyester, which remains relatively cheaper and continues to influence fibre selection decisions in the textile industry.

World trade of raw cotton in 2025/2026 is set to increase with Brazil and the United States remaining the leading exporters, while Viet Nam and Bangladesh continue to be the largest importers. On the export side, Brazil is expected to be the world’s largest cotton exporter for the third consecutive season, accounting for over 30% of global trade, supported by strong production and ongoing improvements in logistics and transport infrastructure. Exports from the United States are also forecast to rise slightly, while shipments from Australia are anticipated to remain broadly stable. On the import side, cotton purchases by China are expected to recover from the sharp decline recorded in the previous season, while imports by Viet Nam are projected to increase further and reach a record level, supported by the expansion of its textile industry. Imports by Bangladesh and Türkiye are forecast to remain at levels similar to those observed in 2024/2025.

9.3.  Market projections

9.3.1. Consumption

Continued expansions of Bangladesh’s and Viet Nam’s milling industry account for bulk of global growth

Cotton consumption refers to the transformation of cotton fibres by mills 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 textile fibres has increased sharply, driven mainly by population and income growth, particularly in low‑income 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. Since the early 1990s, non-cotton fibres have gained solid ground in the textile industry. In 2025, the end-use market share reached 78.9% for chemical fibres and only 21.1% 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 these countries’ incomes and populations are projected to increase. Global mill use is projected to grow by around 1.6% p.a. over the next decade, steady growth driven by increasing textile demand in middle-income and low-income countries where income and population growth are expected to be the strongest.

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 have led to a gradual decrease in China’s cotton mill consumption since 2010. This decline was further exacerbated by the abolishment of the support price system in 2014. This contributed to a move to other Asian countries, notably Bangladesh, Viet Nam and Pakistan. While this trend is expected to persist over the coming 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 is expected to result in continuous growth in cotton mill use, as the country’s textile industry is predominantly cotton-based. This will be supported by various government initiatives, a number of free trade agreements (FTAs) like the India-EU FTA concluded in January 2026 and the India-UK FTA signed in July 2025, as well as foreign direct investment inflows.

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 foreign direct investment, notably by Chinese entrepreneurs. In addition, FTAs, including the ASEAN-China Free Trade Agreement (2004), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, 2018), the EU-Viet Nam Free Trade Agreement (EVFTA, 2020), and the Regional Comprehensive Economic Partnership (RCEP, 2022), 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 trade agreement signed between the United States and Bangladesh in February 2026, which grants zero-tariff access for Bangladeshi apparel made with US cotton, should further support Bangladesh’s expansion in the global textile industry. The expansion of textile 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 3.2% p.a., followed by Bangladesh at 2.6% p.a. Nevertheless, China is expected to remain the largest cotton processing country in 2035, followed by India, with consumption projected to grow by 1.3% and 1.6% p.a., respectively, over the next decade (Figure 9.2).

9.3.2. Production

Global production to grow with improved yields, notably in Brazil

Cotton is grown in subtropical and seasonally dry tropical areas in the northern and southern hemispheres, although most of the world’s production takes place north of the equator. The leading producing countries are China, India, Brazil and the United States. Jointly, these countries are expected to account for around 76% of global output in 2035 (Figure 9.3).

Global production of cotton is expected to grow steadily and reach 29.7 Mt by 2035, 18% higher than in the base period. The foreseen increase will mostly come from growth in the main cotton producers: Brazil will account for about 45% of the global increase, followed by India (25%) and the United States (14%). Overall, gains in cotton production are predominantly driven by higher yields and, marginally, 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 digitalisation supporting precision agriculture will contribute significantly to enhancing productivity and sustainability. In particular, smart irrigation systems can reduce water usage and energy consumption (Wilson, 2023[1]). The use of sensors and GPS technology for fertiliser application ensures that crops receive the right amount of nutrients needed (IFA, 2019[2]). Additionally, drones and satellite imagery provide real-time monitoring of crop health, enabling more efficient application of water, fertilisers and pesticides (Prasad et al., 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 the main producers observed in 2025 is projected to remain constant over the Outlook period. By 2035, yields in Brazil and China are projected to reach well over 2 tonnes per hectare (t/ha), while in India, the second-largest cotton producer, yields are expected to reach only 0.5 t/ha (Figure 9.4, left panel). The cotton area is projected to expand by 1% compared to the base period, with the highest growth occurring in Brazil (+28% compared to the base period), where the prospect of increasing exports encourages producers to invest in increasing the planted area. In Brazil, cotton is very commonly grown in a double-cropping system with soybeans.

Chinese cotton is currently produced with the highest global yield (2.2 t/ha average in 2023-2025). Over the past two decades, the cotton area in China has been declining, although this trend seems to have slowed down since 2016. The cotton area is expected to decrease by 0.3% p.a. during the Outlook period, against a 1% decline in the past decade. While cotton production is expected to increase slightly thanks to consistently higher yields and government support,1 China is expected to remain the largest global producer of cotton by 2035.

Production in India is projected to grow by around 2.4% p.a. over the next decade, mainly due to yield improvements rather than area expansion, since cotton already competes for land with other crops, such as soybeans and pulses. Raw cotton productivity has stagnated 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 maximise yields and enable mechanised harvesting. Following its introduction in the early 2000s, genetically modified (GM) pest‑resistant cotton such as Bt initially reduced pest damage and pesticide use, boosting yields and lowering costs. Over time, however, the effectiveness of Bt technology has moderated, with the emergence of resistance in pests such as pink bollworm and increased incidence of secondary pests. In later years, this has been associated with some increase in pesticide use and rising production costs. 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 yield growth potential at 1.9% p.a. over the next decade, which will not enable India to catch up with China as the world’s largest cotton producer by 2035.

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 3% p.a. Production gains mostly come from higher yields due to the increased use of fertiliser and genetically engineered seeds. 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 maize for second crop, the planted area depends significantly on the profitability of cotton compared to other commodities. In this regard, good profitability and the possibility of advance sales of production have led producers to opt for the cotton crop or expand their areas. Moreover, the Brazilian Cotton Growers Association (Abrapa) enhances the competitiveness of Brazilian cotton by focusing on sustainability, traceability, quality and promotion.

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 2023/2024 season, the market share of virgin cotton covered by programmes recognised by the 2025 Sustainable Cotton Challenge (Textile Exchange, 2025[4]) reached 34% of global cotton production (Figure 9.5). Among the existing standards, Better Cotton, a non-profit organisation, dominates globally at around 23% of all cotton in the 2023/2024 season. 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. Demand for more sustainable cotton is expected to 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 sustainability standards. In India and Pakistan, cotton programmes accounted for 31% and 36% of total cotton production in 2023/2024, respectively. The sub‑Saharan region is also expected to 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 2020/2021 and accounted for 2.9% of world cotton production in the 2023/2024 season, suggesting a growing demand in the next decade.

9.3.3. Trade

Trade growth will originate in Bangladesh and Viet Nam over the next decade

World cotton trade is projected to expand steadily over the next decade by 2.4% p.a. to reach 12 Mt in 2035. This growth will be driven by the increasing demand for textiles in Asian countries, particularly Bangladesh, Viet Nam and Pakistan, where mill use is expanding rapidly. Bangladesh is projected to become the world’s largest importer, supported by an expected annual growth rate of 3%. Viet Nam and China are expected to follow, with respective growth rates of 3.3% and 3.5% p.a.

As Brazil’s role in global cotton production continues to grow, it is expected to remain the largest exporter of raw cotton in 2035, followed by the United States. 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 2023/2024 season. By 2035, Brazil and the United States are projected to account for about two-thirds of global cotton exports.

Brazilian exports are expected to grow strongly over the next decade, benefiting from major investment in improving Brazilian port infrastructure and logistics capabilities. As a result, raw cotton exports are expected to increase by 4.6% p.a., reaching 4.6 Mt by 2035, compared to 3.2 Mt for the United States (+2.4% p.a.). Sub-Saharan Africa as a whole, where cotton is an essential export crop, follows behind (Figure 9.3) with 11% of global exports in 2035.

Sub-Saharan African exports are projected to remain broadly stable in the coming decade and represent nearly 80% of its production (Figure 9.6 left panel), with South and Southeast Asia being the major export destinations. The share of exports in production is projected to fall slightly, mainly reflecting stronger domestic mill use. The textile and apparel industry is expanding in countries such as Ethiopia and Benin, supported by foreign direct investment flows and government investments, leaving fewer opportunities for exports. Access to preferential trade agreements, including the European Union’s Generalized Scheme of Preferences (GSP), further supports the industry’s growth in these countries.

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). As the stock-to-use ratio is expected to be rather stable in the next decade, prices will continue to be influenced by competition from man-made and recycled fibres along with changes in consumers’ preferences and productivity gains.

From the early 1970s, when polyester became price-competitive, cotton and polyester prices moved closely together. Between 1972 and 2009, cotton prices were, on average, only about 6% higher than polyester staple fibre prices. Since 2010, however, declining polyester production costs, mainly driven by efficiency gains and capacity expansion, have led to significantly lower polyester prices, while cotton prices have remained more volatile. As a result, the price gap has widened substantially, with cotton prices averaging around 77% more than polyester prices in nominal terms, with peaks exceeding 100% during 2020‑2023. However, the price gap was observed to have narrowed in 2024/25.

9.4. Risks and uncertainties

Evolving textile demand and supply‑side shocks drive cotton price volatility, which directly impacts farmers’ incomes

Key drivers of per capita textile demand in emerging economies, notably economic expansion and urbanisation, which contribute to rising incomes and evolving consumption patterns, will continue to exert substantial influence on cotton fibre demand, while deviations from expected macroeconomic conditions could alter demand outcomes. Additional demand trends affecting projections encompass the growing adoption of recycling in the textile sector, which now accounts for about 8% of the market, driven primarily by polyester produced from recycled plastic bottles. Within this broader recycling trend, recycled cotton remains marginal in scale and accounted for an estimated 0.3 Mt in 2024, compared to 25 Mt of newly produced cotton. Nevertheless, its expansion may gradually increase competition with cotton fibres and, therefore, slightly moderate the projected growth in cotton mill use over the outlook period (Textile Exchange, 2025[4]).2 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 and demand for organic and other certified cotton offer potential support to cotton demand amid mounting environmental concerns.

Harvest losses, due to pest infestations and weather variations or water availability constraints, along with supply chain disruptions, such as transportation bottlenecks or trade restrictions, can negatively affect cotton production and limit market availability; the resulting price volatility also affects farmers’ income.

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 and the Digital Product Passport, the Product Environmental Footprint and the Strategy for Sustainable Circular Textiles in the European Union exemplify initiatives driving this shift. Nonetheless, there are concerns that certain regulatory approaches could unintentionally disadvantage natural fibres. 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 challenges and opportunities for the cotton industry. The Outlook assumes 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 policymakers globally.

References

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

[3] Prasad, B. et al. (2024), Fields of Tomorrow: Advancements in Modern Agriculture, Astitva Prakashan.

[4] Textile Exchange (2025), Materials Market Report, Textile Exchange, https://textileexchange.org/knowledge-center/reports/materials-market-report-2024.

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

Notes

← 1.  In its Five-year Plan announced in February 2026, China has outlined plans to improve the target price policy for cotton to support farmer’s income.

← 2.  The data cited here refer to mechanically recycled cotton only; chemically recycled cotton is excluded.