New Crop Cotton Export Sales Slowest Start Since 2016

New crop cotton export sales are off to the slowest start since 2016. U.S. export data on Thursday showed total commitments for the 2025/26 marketing year reached 1.2 million running bales, down 7.4 percent year-over-year. 

Mexico is leading in new crop commitments, followed closely by Pakistan. Other top buyers include Honduras, Turkey, and Indonesia. Vietnam is the leading importer of 2024/25 cotton. However, new crop sales are much slower compared to other key buyers. Vietnam is expected to import a record volume of cotton in 2025/26. While that could benefit U.S. exporters, Brazil has been increasing its share in the Vietnamese market, which could further hurt U.S. exports next season. 

Weak export demand has been the primary factor in rising U.S. inventories. Last month, the USDA raised its cotton 2024/25 carryout forecast to 5 million bales due to another decrease in export demand. Consequently, the stocks-to-use ratio increased to nearly 40 percent, the highest since the 2019/20 season. Higher ratios indicate a burdensome supply situation, which tends to suppress prices. 

U.S. tariffs on importers could also deter buyers and put the industry at risk of losing another major customer. Vietnam seems open to free trade agreements, as they have them with 17 countries. A trade deal between the U.S. and Vietnam would be a positive step toward offering the cotton market another life preserver.