In its January 2026 World Agricultural Supply and Demand Estimates (WASDE) report, USDA has revised global cotton production downwards by 350,000 bales to 119.43 million bales from December 2025 projections. Coupled with a forecasted rise in global consumption to 118.92 million bales, this tightening supply has pushed the global stocks-to-use ratio below 63 per cent, signaling firmer price foundations for the upcoming quarters.

Regional divergence and yield volatility

The production squeeze is primarily driven by significant downward revisions in the United States and India. US output has been revised downwards by 2 per cent to 13.9 million bales due to poor weather conditions in the Delta region, where national average yields fell by 8 per cent to 856 pounds per acre. Similarly, India faces a 3 per cent decline due to uneven monsoons and pest pressure. Conversely, China’s crop forecast was raised by 1 million bales, though this gain was insufficient to offset the losses from other major exporters.

Strategic sourcing and inventory management

For apparel manufacturers, the report highlights a critical shift: ending stocks are projected to fall by 1.5 million bales to 74.48 million. With trade volumes remaining essentially flat, retailers must navigate a landscape of higher input costs. This inventory drawdown is expected to accelerate the industry's transition toward synthetic blends and recycled fibers as brands seek to de-risk their portfolios from the volatility of natural fiber yields.

The World Agricultural Supply and Demand Estimates (WASDE) is the definitive monthly report used by the global textile industry to project raw material costs. Covering major cotton hubs like China, India, and the US, it dictates the pricing of yarn and fabric globally. Current industry plans focus on diversifying sourcing to mitigate the impact of the 20-year low yields seen in key regions this season.