The war in Iran has focused everyone’s attention on the Strait of Hormuz and its repercussions. A recession is looming as the main players try to find an acceptable solution: The U.S. is trying to secure concessions on Iran’s nuclear program to justify its war; Iran is trying to secure financial concessions to open the strait and collect a toll on every passage, while Israel is trying to take advantage of a phantom ceasefire to attempt, in vain, to eradicate Hamas and the Lebanese Hezbollah. 

Meanwhile, a crisis in U.S. Treasury bonds is driving up their yields. Even though this situation is offset by the impact of stablecoins backed by the U.S. dollar, the situation remains concerning. 

There is no need to mention the situation in Ukraine, which is deteriorating day by day, and in which the United States has lost all interest despite the real risk of further escalation. 

It is against this backdrop that the cotton market has decided to embark once again on a “roller coaster ride.” After months of dead calm, this adrenaline rush is being received with varying degrees of enthusiasm by traders. 

The lack of demand, U.S. cotton export sales figures, coupled with the rise in certified cotton ready for delivery against the July 2026 contract on the ICE in New York, have triggered a massive exodus of speculators, who are now shifting their focus to the new crop. 

After falling sharply during the Eid al-Adha holidays, the market is now trending upward, supported by the situation in India and despite the downturn in China. In fact, the Indian government has just decided to suspend import taxes (11%) until the end of October 2026, which should provide a much-needed boost to the market. 

Such a measure should primarily benefit cotton from the Northern Hemisphere, particularly that from West Africa, whose characteristics closely match the local qualities highly sought after in the southern part of the country.

The current stability of the dollar should allow operators to act without too much apprehension in a more favorable yarn market. 

Bangladesh, for its part, continues to suffer the fallout from the Gulf War and difficulties in securing hydrocarbon supplies, which is slowing industrial activity and reducing cotton demand… The heatwave currently affecting Europe reminds us that we are in a year when El Niño is expected to intensify and significantly impact the Indian subcontinent and the monsoon. 

But the rest of the world will not be spared. 

The supply of fertilizer remains critical and is also expected to weigh on both yields and the cost of cotton. We remain of the opinion that cotton prices should quickly return to between 82 and 85 US cents per pound.