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Global cotton has shrunk to its limit. In 2024, the cotton planting area in the United States increased significantly, but due to the impact of drought and hurricanes, the yield was continuously reduced, resulting in a final increase of only 11.5% compared to the previous year; However, the cotton production of the Brazilian Cotton Research Institute has significantly increased, surpassing the United States to become the third largest cotton producer in the world. In 2024, it increased by 27.6% compared to the previous year of the Agricultural Products Research Institute, and is expected to increase further in 2025. Therefore, it is expected that the global cotton supply will remain relatively loose in 2025; On the demand side, due to Trump's election as the President of the United States, tariffs on imported goods will continue to increase, making it difficult to improve the demand for cotton.
According to the chronological order of natural months, we believe that from the beginning to the end of the relevant charts in 2025, we can pay attention to the following influencing factors: in mid to late January, pay attention to whether the United States will continue to impose a 10% tariff on Chinese goods, and before April, pay attention to whether the cotton planting area between China and the United States will decrease
Decrease; From May to September, cotton growth and sales in the United States; From September to December, the comprehensive purchasing cost of Xinjiang cotton in China and the export situation of cotton from the United States.
The global cotton supply and demand are basically balanced, but supply still exceeds demand. In addition, due to the complex trade environment and the possibility of weakened demand in the coming year, cotton is still in a surplus period. However, the significant decline in prices has already digested most of the negative news, and the price drop is limited. We believe that ICE cotton below 60 cents is a low-priced area, and even if it falls below 70 cents in the future, it will quickly stabilize at 70 cents. In 2025, cotton will fluctuate around 75 cents, and we will look for long opportunities below. The above determines the selling point. Corresponding to domestic futures prices, they will fluctuate around 14000 yuan, with cotton prices above 15000 yuan overvalued and those below 13000 yuan undervalued.
The latest USDA report for December shows that global cotton production has been raised to 25.559 million tons, an increase of 973000 tons from the previous year, mainly due to increased production in countries such as India, Argentina, and Brazil. Among them, India's production increased by 217700 tons, contributing the most to the global total production growth. Global cotton consumption has been raised to 25.21 million tons, an increase of 450000 tons from the previous year. This is mainly due to the increase in consumption in countries such as India, Pakistan, and Vietnam; Due to a decrease in ending inventory, the global cotton inventory consumption ratio has dropped to 65.65%. From the data, it can be seen that the cotton planting area in the United States has increased significantly in the past 24 years, but due to the impact of drought and hurricanes, the yield has been continuously reduced, and the final yield has only increased by 11.5% compared to the previous year; However, Brazil's cotton production has significantly increased, surpassing the United States to become the world's third-largest cotton producer. In 2024, it increased by 27.6% compared to the previous year, and is expected to increase further in 2025. Therefore, it is expected that the global cotton supply will remain relatively loose in 2025; On the demand side, due to Trump's election as the President of the United States, tariffs on imported goods will continue to increase, making it difficult to improve the demand for cotton.