Cotton supply tightens as world consumption outpaces production

Global cotton markets are heading into 2026/27 with a wider supply gap. USDA’s November WASDE puts world consumption at 122.75 million bales against production of 117.48 million, a shortfall of about 5.3 million bales. Ending stocks are forecast to fall from 75.64 million to 70.57 million bales, the lowest level in 15 years. Unless global harvests are revised up sharply, this could support prices in the months ahead.

Bangladesh and Vietnam, the world’s two largest cotton importers, are moving in different directions. Bangladesh’s consumption is forecast at 7.4 million bales and imports at 7.2 million, both cut again this month. Use is flat on last year and well below the 8.2 million bales of 2024/25.

In my view, the main reason is energy. Falling domestic gas output, disrupted LNG imports from the Middle East and a fire at an LNG terminal left mills short of gas through the summer. Many spinning units ran well below capacity, some at under 30 percent, and others stopped altogether. The government’s recent decision to replace duty-free bonded imports of 10–30 count yarn with a bank-guarantee system was meant to shift demand to local spinners. Mills without steady gas could not take up that demand, while garment exporters now face higher input costs.