Cotton Hits 23-month High

Cotton increased to 81.82 USd/Lbs, the highest since May 2024. Over the past 4 weeks, Cotton gained 16.76%, and in the last 12 months, it increased 24.74%.

Cotton futures traded around 83 cents per pound, close to the highest since April 2024, mainly supported by elevated oil prices amid the ongoing Middle East disruptions and stalled US-Iran peace talks. Higher crude oil prices increase polyester production costs, which in turn support cotton prices as a natural substitute. At the same time, drought risks persisted across key US growing regions, particularly West Texas, partly offset by better conditions in the Delta and Southeast US. Meanwhile, demand prospects softened following weak US export sales. The latest USDA's weekly export sales report showed net sales of Upland totaling 119,900 running bales for 2025/26, down 26% from the previous week and 55% below the four-week average.

Cotton futures traded around 80 cents per pound, the highest since May 2024, mainly supported by strong speculative buying and tightening supply perceptions. The US harvest remains under threat from a severe drought in Texas, the main producing state, potentially the worst in a decade or two, with only 11% of cotton planted so far. Meanwhile, Brazil is expanding its role in global trade, posting record cotton exports for March and breaking the typical end-of-year shipment pattern. The market has also been influenced by geopolitical tensions, which have pushed up oil prices and, in turn, supported cotton by making synthetic fibers more expensive. At the same time, ongoing disruptions to maritime routes have increased shipping delays and raised freight and insurance costs.