Quality reports have been generally good or fair, with fine weather assisting harvest in many regions, and yields coming in around average to slightly better than expected, given the variable nature of soil moisture and irrigation supplies across major growing regions this season.
Cotton prices found some solid support through autumn, with prices recovering to levels not seen since the harvest of 2024.
With harvest completed in the north and nearing completion in the south, the 2025-26 production year for many Australian cotton growers has been a delicate balance of prioritising limited water supply and increasing costs, against what initially looked to be relatively low and flat price outlook, ANZ said.
The country may see a further contraction in cotton crop to 3 million bales for the 2026-27 season.
In fact, in early May, the benchmark global Cotlook ‘A’ index rose above 90 US cents per pound (USc/lb) for the first time since April 2024, staging a more than 25-per cent recovery after bottoming out at 73 USc/lb for the growing season in December 2025.
The driver of the price rebound appears to be a combination of some production concerns due to dry conditions in key US growing regions as the new crop is planted, an increase in immediate demand from cotton mills, and improved consumer demand signals from large consuming nations like the United States and China.
Australia is projected to see a further contraction from the current cotton crop to just 3 million bales for the 2026-27 season. Recent forecasts by the Australian Bureau of Agricultural and Resource Economics and Sciences suggest planted area in Australia for the new season will reach just a little over 400,000 hectares—the lowest since the drought-hit 2020-2022 years.
With production forecast to retract, global consumption could outpace production by around five million bales, a reversal of the current situation and a generally positive signal for prices. Trade is, however, forecast to remain stable, as ample stocks held by major consuming nations can be drawn on to meet supply needs.
A smaller Australian cotton crop, amongst the backdrop of a smaller global supply, should increase competition for exports and, in theory, bode well for prices, the report by the multinational banking and financial services company ANZ Bank added.
Fibre2Fashion News Desk (DS)
