Where does cotton come from?

Cotton is a subtropical shrub grown as an annual. It wants around six months without frost, hot days during boll development and dry weather at harvest so the open fiber does not rot or stain. Rain-fed cotton grows on the black soils of central India and the plains of Texas; irrigated cotton, which yields far more per hectare, grows in deserts and semi-deserts where rivers or aquifers supply the water: Xinjiang in western China, Pakistan's Indus valley, Uzbekistan's Fergana and Amu Darya basins, Australia's Murray-Darling, Egypt's Nile and the San Joaquin valley of California.

In 2023 China produced 5.6 million tonnes of cotton lint, 23% of the world's 24.7 million tonnes (FAOSTAT). India was second with 5.5 million tonnes (22%), followed by Brazil, United States and Pakistan. The top five countries grew 75% of world lint, and 87 countries reported a crop; world output changed by +0% over the ten years to 2023.

The map has moved. China's crop concentrated in Xinjiang as eastern provinces turned to other uses, and the region's irrigated, mechanized farms yield more than twice the world average. India's area is the largest of any country but yields are low, because most of it is rain-fed and planted with hybrids whose insect resistance has faded. Brazil grows cotton in Mato Grosso and Bahia as a second crop sown in January after an early soybean harvest, a system that expanded quickly through the 2010s and 2020s. The United States grows most of its cotton on the Texas High Plains, where abandonment in dry years swings the national crop. West Africa's franc-zone countries, Benin, Mali, Burkina Faso and Ivory Coast (Côte d'Ivoire), grow rain-fed cotton on smallholdings and export almost all of it as lint.

Cotton is traded as lint, ginned but not yet spun, and the spinning countries are not the growing countries. In 2024 world exports of raw cotton lint (HS 5201) were worth $17.3 billion (CEPII BACI). Brazil was the largest exporter with 30% of that value, ahead of United States (28%) and Australia (14%). Australia, the West African countries and, in some years, India complete the list; China and Pakistan grow large crops but spin them at home.

The buyers are mills. China imported 26% of world lint by value in 2024, followed by Bangladesh and Vietnam, with Bangladesh, Turkey, Pakistan and Indonesia behind them. The next stage is a different map again: India led exports of cotton yarn (HS 5205) in 2024 with 30% of the value, and fabric and garments move on to Europe and North America. Since 2021 US rules on Xinjiang-origin cotton have pushed mills in Vietnam and Bangladesh to document the origin of every bale, which favors traceable US, Brazilian and Australian lint.

The world price is the Cotlook A Index, an average of the cheapest quotes for middling-grade upland cotton offered to mills in the Far East on a cost-and-freight (CFR) basis, which the World Bank carries as Cotlook A Index, CFR Far East. In August 2026 it stood at $2.11/kg, up 22% from a year earlier (World Bank Pink Sheet). Its nominal high was $5.06/kg in March 2011, during the 2010/11 squeeze, and its low since 1960 was $0.6/kg in August 1969. Because the index is delivered to Asian ports, it moves with ocean freight and container rates as well as with the crop.

The futures benchmark is ICE Futures US Cotton No. 2 (ticker CT, 50,000 pounds, quoted in US cents per pound), deliverable at US warehouses for strict low middling grade, 1-1/16 inch staple. Physical cotton is sold at a basis to the nearest ICE month, with premiums and discounts for grade, staple length, strength and micronaire (fiber fineness) as measured by high-volume instrument (HVI) classing on every US bale. Growers in the United States and Brazil often sell on-call against futures and fix the price later, so the volume of unfixed on-call sales is watched as a source of buying pressure. Extra-long staple cotton (pima, Egyptian Giza) trades at a separate premium and has no futures contract.

Three ambiguities. Production is lint, the fiber after ginning; seed cotton as picked weighs roughly two and a half to three times as much. USDA's balance sheet counts 480-pound bales rather than tonnes. And the A Index is a CFR Far East price while ICE is a US warehouse price, so the two diverge whenever freight, US export demand or the dollar move.

Texas grows most US cotton on semi-arid land where a dry spring means fields are abandoned before harvest; abandonment above a third of planted area, as in 2022, can cut the US crop by a fifth and lift ICE futures because the US is the exporter that mills fall back on. India's rain-fed crop depends on the monsoon reaching the Deccan on time, and Pakistan's on the Indus and on flood years like 2022, when Sindh lost most of its crop.

China's state reserve bought most of its own crop from 2011 to 2013 and then auctioned the pile down over the following years, so the timing of reserve purchases and sales moved world prices more than any single harvest. Imports are metered through a tariff-rate quota and additional sliding-scale quotas issued at the government's discretion; when Beijing issues extra quota, Asian mills' demand for US, Brazilian and Australian lint rises at once.

Polyester makes up the larger part of world fiber use, and its price follows crude oil and Chinese PTA and MEG capacity. When cotton trades well above polyester, spinners raise the synthetic share of blends and cotton demand falls; when oil spikes, cotton looks cheap. The ratio between the A Index and the polyester staple price is the market's measure of that substitution.

The stocks-to-use ratio, ending stocks divided by consumption, tells how much lint is left before the next harvest. USDA put world cotton stocks-to-use at — for 2026/27, against — in 2025/26 (USDA PSD). Traders strip out China's stocks, which are not for export, and watch the ratio in the rest of the world; the 2010/11 spike came when that ex-China ratio fell to a record low.

Cotton demand is the demand for clothing and home textiles, and it moves with consumer spending in the United States and Europe and with the inventory cycle of retailers. Overstocking in 2022 led brands to cancel orders, mills in Vietnam and Bangladesh cut runs, and lint prices fell by more than a third in months. Fashion sourcing decisions, and shifts in production between China, Vietnam and Bangladesh, change which import market matters most.

The US Withhold Release Order of January 2021 and the Uyghur Forced Labor Prevention Act, in force from June 2022, presume that anything containing Xinjiang cotton is barred from the United States, so brands demand isotope testing and traceable bales. India has suspended exports (2010) and taxed them, Pakistan has waived import duties, and the US and Brazil settled a decade-long WTO subsidy dispute in 2014. Each rule reroutes lint between origins without changing the world crop.

Brazilian and Australian growers sell in dollars and pay costs in reais and Australian dollars, so a weaker real or A$ makes their lint cheaper for Asian mills relative to US cotton. A weaker rupee lifts Indian farmgate prices above the government's minimum support price and unlocks exports; a stronger one has the reverse effect. Cotton's dollar price therefore tends to fall when the dollar rises, as with other exported farm goods.

Bollworms, pink bollworm, whitefly and, historically, the boll weevil are cotton's main enemies. Bt cotton, commercialized in the United States in 1996 and in India in 2002, cut insecticide use for a decade, but pink bollworm in India and Pakistan has evolved resistance and yields there have stagnated. Boll weevil eradication in the United States, completed in most states, is one reason US yields rose while insecticide use fell.

Almost all commercial cotton is upland (Gossypium hirsutum), a medium-staple fiber; the long-staple Gossypium barbadense types, pima in the United States and Peru, Giza in Egypt, make up a small premium share used for fine shirting and luxury bedding. Seed is planted in spring, in April and May in the United States and China, June with the monsoon in India, and January for Brazil's second crop; the plant flowers over several weeks and the bolls open sixty to eighty days after flowering. Harvest runs from September to December in the northern hemisphere and from June to August in Brazil and Australia. In mechanized systems a defoliant is applied first, then spindle pickers (or stripper harvesters on the High Plains) gather the seed cotton into modules; in India, Pakistan and Africa the crop is hand-picked over several passes.

The gin separates fiber from seed. Seed cotton is dried, cleaned of leaf and sticks, and fed through saw or roller gins that strip the lint from the seed; roller gins are used for long-staple cotton to preserve fiber length. Lint is roughly a third to two-fifths of the seed cotton by weight and is pressed into bales, 480 pounds in the United States and around 170 to 230 kilograms elsewhere. Each bale is sampled and, in the United States, Brazil and Australia, classed by HVI for color grade, leaf, staple length, strength, micronaire and uniformity, which become the premiums and discounts on the sale.

Cottonseed is the main byproduct: crushed for cottonseed oil and a high-protein meal for cattle, or fed whole to dairy cows. Linters, the short fuzz left on the seed after ginning, become cellulose for paper, film and explosives. At the mill, lint is opened, cleaned, carded and often combed to remove short fibers, drawn into slivers, and spun on ring or open-end frames into yarn whose fineness is measured in counts. Yarn is knitted or woven, dyed and finished, and only then cut into garments, usually in a different country from the one that grew the fiber.

Cotton is the world's main natural textile fiber, and clothing takes most of it: denim, T-shirts, shirting, underwear and knitwear, followed by home textiles such as sheets, towels and upholstery. Medical and hygiene products use bleached cotton for gauze, swabs and pads. The seed supplies cooking oil and cattle feed, and linters supply cellulose for banknotes, photographic film and nitrocellulose. Cotton's share of total fiber use has fallen for decades as polyester grew cheaper, so its market is set as much by the price of oil-based fibers as by the size of the crop.

Ginning happens near the farm, because seed cotton is bulky and gins must run within weeks of harvest; Texas alone has hundreds of gins, and West African cotton companies run national gin networks that also supply seed and credit to farmers. Spinning concentrates where labor is cheap and mills are close to garment factories: China, India, Vietnam, Bangladesh, Pakistan, Turkey and Indonesia hold most of the world's spindles. Merchants connect the two. Louis Dreyfus, Olam Agri, Cargill, ECOM, Paul Reinhart and the US cooperatives Staplcotn and Calcot buy bales from growers, warehouse and class them, and sell forward to mills on ICE-linked contracts.

Lint moves in containers, not bulk, so the trade depends on container availability and on ports that handle boxes: Houston, Galveston, Savannah, Charleston and Los Angeles-Long Beach for the United States; Santos for Brazil; Brisbane, Sydney and Melbourne for Australia; Karachi for Pakistan; and Abidjan, Lomé and Cotonou for West Africa. Landlocked Mali and Burkina Faso rely on rail and road corridors to those ports. Transpacific and Asia-bound routes cross the Panama Canal or the Red Sea, and the 2021 container shortage and 2024 Red Sea diversions both delayed shipments to mills.

The single points of failure are concentration and water. Xinjiang grows most of China's cotton, which makes the largest producer's supply vulnerable to a single region's politics and traceability rules. The Texas High Plains pump the Ogallala aquifer, and Pakistan's and Uzbekistan's crops depend on rivers that upstream users and glaciers control. On the demand side, a handful of Asian spinning countries, led by China, take most of the traded lint, so a slowdown in garment orders reaches growers within a season.