Raney Rapp 

Cotton growers across the globe are improving in efficiency year-over-year. It’s a win for farm technology, but creates a tough marketplace for the former number one worldwide cotton exporter – the U.S. 

In 2024, Louis Dreyfus cotton analyst and former National Cotton Council chairman Joe Nicosia warned cotton farmers to ‘compete or get beat’ in the global race for cotton demand. He is now urging producers to focus on telling the story of cotton to grow global demand, rather than fight over a small portion of the existing marketplace. 

“We are now a follower,” Nicosia said. “If we’re not the price maker, we’re the price takers.” 

Nicosia said 2024 brought with it a dramatic drop in prices as world competition increased in the cotton trade. A bumper crop in China, typically the world’s largest exporter, as well as quality cotton in Brazil and less than stellar U.S. growing conditions all contributed to price and demand decreases. 

“The change went from a tight stock situation that we had in 2023 to a very loose situation, not just in the United States, but in the world as well, in 2024,” Nicosia said. “If you look at the U.S. cotton balance sheet, you can see the difference. We go from 3.15 million bales on a carryout situation to 4.9 million bales. 

“The problem is not just the U.S. carryout situation in securing sound prices moving forward. “One of the other problems is the alternative cotton situation continues to be oversupplied. So even if the U.S. were to tighten its balance sheet today, there isn't any panic on the buyer's part, because they know they have multiple supplies of cotton available to them around the world.” 

While total fiber consumption continues to grow anywhere from 1.5% to 2.5% each year, cotton demand continues to disappoint, Nicosia said. Global conflicts create the basis for this problem. 

Cotton conflicts  

•Interest Rates  

In order for cotton demand to increase, Nicosia said companies and consumers invested in cotton needed to see evidence of lower interest rates on the horizon.  

“We needed to see the Federal Reserve signal that interest rate hikes are done,” Nicosia said. “What's happened instead is interest rate reductions have stopped due to the uncertainty about tariffs and inflation. So that's not moving forward.” 

•Inflation 

In a similar vein, Nicosia said inflation rates also must decrease. “It’s slowed, but it's still present. And the worry today in the marketplace is that maybe those drops are over the short term,” he said.  

•China 

As the most populous country in the world, Chinese cotton demand is critical to global demand. With a domestic economy still under pressure and high production numbers in the previous cotton crop, Chinese demand didn’t make the cut in 2024. 

“China is critical to the United States cotton industry as traditionally, the largest importer in the world,” Nicosia said. “This year, they're not. Vietnam and Bangladesh are going to import more cotton than China.” 

•Global Conflicts 

Cotton demand stalls when countries’ domestic economies can’t move past conflict. Nicosia said peace is an important driving factor in cotton demand.  

“We need peaceful resolution in Ukraine and Gaza,” Nicosia said. “We've had limited progress because there are quite a few moving pieces in that situation, but obviously we haven't gotten to the point where we will have peace.” 

•Consumers  

The most critical factor, Nicosia said, is growing consumer awareness and preference for cotton over other fibers – particularly manmade fibers like polyester. Increasing worldwide demand for cotton depends heavily on consumer demand and Nicosia said the cotton industry needs to make greater strides in consumer education.  

“The world needs to find out about biodegradable, sustainable cotton versus polyester. Have consumers recognized that or not?” Nicosia asked. “Awareness, I believe, is beginning to gain some traction, but we've got a long way to go.” 

To succeed on the global stage, grow demand and increase cotton prices, Nicosia said cotton producers are going to have to make themselves an elite industry. 

“We have a battle in everything we do for United States cotton, which is why we continue to push forward,” Nicosia said. “We need to do better everywhere - even if it's incremental - whether it's production, warehousing, shipping, or merchants.”