Cotton Prices: Trend, Index, Chart, Demand and Forecast for Q2 2026

According to ChemAnalyst, The global Cotton market experienced mixed pricing trends during the second quarter of 2026, reflecting the influence of regional supply-demand dynamics, production costs, inventory levels, and macroeconomic conditions. While Cotton Prices in North America faced downward pressure due to rising inventories and weakening textile trade, the APAC market remained largely stable amid ample stockpiles and subdued demand. In contrast, Europe witnessed an upward movement in Cotton Prices as tightening global supply expectations and higher production costs supported the market.

Cotton remains one of the most important agricultural commodities globally, serving as a critical raw material for the textile, apparel, and industrial fabric sectors. Throughout Q2 2026, the market was shaped by elevated farming costs, fluctuating consumer demand, changing trade patterns, and policy interventions across major producing and consuming countries.

This Cotton Prices report provides a detailed regional analysis of market developments in North America, APAC, and Europe while highlighting the major factors influencing price movements during the quarter ending June 2026.

Cotton Prices in North America

United States Cotton Market Performance

During Q2 2026, the Cotton Price Index in the United States experienced downward pressure despite persistent increases in production costs. Cotton Prices were assessed at approximately USD 1,790 per metric ton in the USA, reflecting a market weighed down by rising inventories and sluggish international textile trade.

One of the primary challenges facing the Cotton market was the significant increase in projected ending stocks. Forecasts released during May 2026 indicated higher carryover inventories, signaling abundant supply availability heading into the second half of the year. This surplus inventory created bearish sentiment among traders and buyers, limiting price growth despite elevated cultivation costs.

Meanwhile, cotton growers continued to face increased operating expenses. Fertilizer prices rose significantly during mid-February and remained elevated throughout the quarter. Diesel fuel costs also stayed high, increasing expenses related to planting, irrigation, harvesting, and transportation.

Demand Conditions in the United States

Demand for Cotton remained mixed throughout Q2 2026. On one hand, retail activity showed encouraging signs, with retail sales increasing by 6.9% year-on-year in May 2026. Strong consumer spending supported apparel and textile purchases to some extent.

However, inflationary pressures continued to affect consumer behavior. The Consumer Price Index (CPI) rose by 3.5% in June 2026, reducing disposable income and weakening demand for discretionary products, including cotton-based apparel and home textiles.

Industrial activity provided limited support to the market. Industrial production increased by only 0.7% year-on-year during June 2026, reflecting moderate manufacturing growth. Although the textile manufacturing sector expanded during the month, indicating some recovery in domestic production activity, overall demand remained insufficient to absorb the growing inventory levels.

Trade Challenges Impacting Cotton Prices

International trade conditions further pressured the Cotton market. Textile and apparel imports into the United States declined significantly during the January-April 2026 period, reflecting weaker global demand and ongoing economic uncertainties.

Export performance also deteriorated, reducing overseas sales opportunities for domestic cotton producers. Lower export volumes combined with rising stock levels created additional downward pressure on Cotton Prices throughout the quarter.

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Why Did Cotton Prices Change in June 2026 in North America?

Several key factors contributed to Cotton price movements during June 2026:

• Producer Price Index (PPI) increased by 5.5%, raising manufacturing and processing costs.
• Consumer Price Index (CPI) rose 3.5%, reducing purchasing power and limiting textile demand.
• Forecasts showed higher cotton ending stocks, resulting in oversupply concerns.
• Weak export activity reduced international demand for U.S. cotton.
• Elevated fertilizer and diesel costs increased cultivation expenses.

Cotton Price Forecast in North America

The Cotton Price Forecast for North America remains cautiously bearish. While production costs continue to support price floors, elevated inventory levels and weak textile trade may limit any significant upward momentum. Future market direction will largely depend on export demand recovery, domestic textile manufacturing growth, and weather conditions affecting upcoming harvests.

Cotton Prices in APAC

China Cotton Market Performance

The Cotton market in China remained relatively stable during Q2 2026 despite ongoing challenges in domestic demand and trade restrictions. Market participants balanced the impact of higher production costs against ample supply availability and subdued consumption patterns.

Cotton production costs increased during the quarter due to rising agricultural input expenses. A significant factor was the 4.1% increase in China's Producer Price Index (PPI) in June 2026, which raised operational costs across the textile and agricultural sectors.

Additionally, global fertilizer prices continued their upward trajectory following geopolitical disruptions that emerged during Q1 2026. These higher input costs affected cotton cultivation economics and contributed to maintaining baseline price support.

Demand Trends in China

Demand for Cotton remained sluggish throughout much of Q2 2026. Weak retail sales growth of only 1.0% in June highlighted cautious consumer spending behavior and limited downstream textile demand.

The yarn manufacturing sector also experienced softer sales volumes, reducing procurement activity among spinning mills. Furthermore, import quota restrictions constrained market participation and influenced purchasing patterns across the supply chain.

Despite these challenges, some positive indicators emerged during the quarter. China's Manufacturing Index expanded in June 2026, signaling growth in industrial and textile production activities. Industrial production also increased by 5.3% year-on-year, providing support for raw material consumption.

Inventory and Supply Conditions

Inventory dynamics played a crucial role in shaping Cotton Prices during Q2 2026. While China experienced gradual inventory destocking since January 2026, substantial stockpiles remained available at major ports.

The existence of these large inventories ensured adequate supply availability and prevented significant price increases despite rising production costs. The market therefore remained balanced, with supply conditions offsetting the effects of higher operating expenses.

China's raw cotton imports declined month-over-month during May 2026. However, imports remained significantly higher on a year-over-year basis, highlighting the country's continued reliance on global cotton supplies.

Government Policy Support

A notable policy development occurred in May 2026 when authorities extended Xinjiang's cotton target price policy. This measure was designed to stabilize farmer incomes and encourage continued cultivation, reducing uncertainty within the domestic cotton sector.

The policy extension helped maintain market confidence and supported long-term production planning among growers and industry stakeholders.

Why Did Cotton Prices Change in June 2026 in APAC?

The primary factors influencing Cotton Prices in China included:

• Large port stockpiles ensured adequate market supply.
• Weak domestic demand limited buying activity.
• Restricted import quotas reduced market flexibility.
• Producer Price Index rose 4.1%, increasing production costs.
• Sluggish yarn sales weakened downstream consumption.

Cotton Price Forecast in APAC

The outlook for Cotton Prices across the APAC region remains relatively stable. Strong industrial production growth and government support measures may provide moderate demand support. However, ample inventories and cautious consumer spending are expected to limit significant price increases in the near term.

Cotton Prices in Europe

Germany Cotton Market Performance

Unlike North America and APAC, Europe experienced a firmer Cotton market during Q2 2026. In Germany, the Cotton Price Index increased as rising production costs and tightening global supply expectations outweighed weaker domestic demand indicators.

European buyers faced increasing procurement costs throughout the quarter. Producer prices in Germany were 2.2% higher in May 2026, while fertilizer prices continued to rise sharply. These cost increases translated into higher expenses across the textile manufacturing and processing sectors.

Supply-Side Concerns Support Cotton Prices

A key driver behind the rise in Cotton Prices was growing concern regarding future global supply availability.

Market forecasts for the 2026/27 season suggested a modest contraction in global cotton acreage and production. These projections heightened expectations of tighter ending stocks and reduced export availability from major producing countries.

Adding to supply concerns were drought conditions affecting important cotton-growing regions in the United States. Persistent dry weather increased crop abandonment risks and created uncertainty regarding future harvest yields.

As a result, European buyers adopted a more cautious procurement strategy, contributing to stronger Cotton Prices throughout the quarter.

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Demand Conditions in Germany

Demand fundamentals remained mixed across Europe. Retail sales in Germany increased by 1.8% year-on-year during May 2026, providing some support to textile consumption.

However, consumer confidence remained weak, with sentiment reaching -14.6 in June 2026. This negative outlook reduced discretionary spending and limited growth in apparel demand.

Manufacturing activity also faced challenges. Industrial production remained unchanged at 0.0% in May 2026, indicating stagnant industrial demand for raw cotton and textile inputs.

Inflation further complicated the market environment. Germany's Consumer Price Index increased by 2.3% year-on-year in June 2026, reducing purchasing power and creating additional pressure on consumer spending.

Why Did Cotton Prices Change in June 2026 in Europe?

Several factors influenced Cotton Prices during June 2026:

• Producer prices increased 2.2%, raising manufacturing costs.
• Fertilizer costs surged, increasing agricultural production expenses.
• Consumer confidence remained weak at -14.6.
• Manufacturing activity contracted across several sectors.
• Global production forecasts indicated tightening supply.
• U.S. drought conditions increased concerns over future cotton availability.

Cotton Price Forecast in Europe

The Cotton Price Forecast for Europe suggests continued upward pressure in the coming quarters. Expectations of tighter global supply, declining production acreage, and weather-related risks may support higher prices. Nevertheless, weak consumer sentiment and sluggish manufacturing activity could limit the pace of future increases.

Global Cotton Market Outlook for the Second Half of 2026

Looking ahead, the global Cotton market is expected to remain influenced by the balance between supply concerns and demand uncertainty. North America faces inventory-driven price pressure despite elevated production costs, while APAC continues to navigate abundant supply and subdued consumption. Europe, meanwhile, remains supported by tightening supply expectations and rising production expenses.

Several factors will determine future Cotton Prices, including weather conditions in major producing regions, global trade flows, fertilizer and energy costs, inflation trends, and textile sector performance. Additionally, government policies and inventory management strategies will continue to play a significant role in shaping market sentiment.

Overall, Cotton Prices are likely to remain volatile during the second half of 2026 as market participants respond to changing supply forecasts, macroeconomic conditions, and evolving global demand patterns. Stakeholders across the textile and apparel value chain will closely monitor these developments to manage procurement strategies and mitigate pricing risks in an increasingly dynamic market environment.

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