U.S. cotton spot prices have surged from the low 60s to the mid-70s cents per pound since February, with the USDA AMS seven-market average reaching 75.29¢/lb the week ending April 30 — and the broader market now trading near 79–82¢/lb in late May. The rally reflects a market rapidly repricing as the 2026/27 supply deficit becomes the dominant narrative.
How Prices Evolved in Spring 2026
Key Price Drivers
- Production deficit: USDA forecasts 116.0M bales of production vs 121.7M of consumption — a 5.7M bale gap that will draw stocks to a six-year low.
- Speculative reversal: Record net-short positions that began in April 2024 ended in March 2026 as speculators flipped to neutral/long, fueling the rally.
- Higher oil & polyester: Elevated crude prices boosted polyester costs, making cotton more price-competitive and supporting demand.
- U.S. dollar & weather: A weaker dollar in mid-May provided a tailwind. Dry conditions in Texas are being closely watched for planting progress.
- Chinese import support: The China Cotton Index (3128B) rose from 111 to 121¢/lb over the past month, signaling strong buying interest from the world's top consumer.
International Price Comparison
The rally is global in scope. Indian spot prices rose from 82 to 88¢/lb (59,400 to 65,800 INR/candy), while Pakistani prices climbed from 85 to 94¢/lb. The ICAC's Cotlook A Index forecast range of 73–84¢/lb (midpoint 78¢) for 2025/26 validates the current price levels, though the USDA's 2026/27 season-average farm price of 73¢/lb suggests some caution about sustainability.
Outlook
With global stocks-to-use dropping to 59% — the lowest since 2020/21 — the fundamental picture supports prices well above the 60¢/lb levels seen earlier in 2026. However, the pace of the rally may moderate as the market prices in new-crop production potential and monitors Northern Hemisphere planting. Cotton Incorporated notes that while a "production shortfall has already been penciled in," the extent to which that estimate widens or contracts as the new crop year unfolds will determine the next leg of the price move.
Sources: USDA AMS Weekly Cotton Market Reviews (Feb–May 2026), Cotton Incorporated Monthly Economic Letter (May 2026), USDA WASDE (May 2026), TradingEconomics, Fibre2Fashion, ICAC Cotton This Month.