Cotton prices climbed across all major benchmarks in May 2026, with the NY Nearby contract reaching 86.3 cents/lb as of May 12. A convergence of supply-side tightening, a historic shift in speculator positions, and geopolitical disruption from the Iran conflict are driving the upward trend. Textile manufacturers and procurement professionals can find the latest market information on textilezon.com to stay current with evolving raw material costs.
Recent Cotton Price Data
All cotton benchmarks moved higher over the past month. Prices for the nearby July NY/ICE futures increased in several steps. The upward trend that started in early March flattened out near 80 cents/lb in late April. There was then a surge and a pause around 85 cents/lb around the beginning of May. More recently, there was another move higher that pulled values near 88 cents/lb.
| Benchmark | Latest Value (May 12) | Latest Month (Apr) | Last 12 Months (May25-Apr26) |
|---|---|---|---|
| NY Nearby | 86.3 cents/lb | 84.7 cents/lb | 67.3 cents/lb |
| A Index | 97.6 cents/lb | 94.0 cents/lb | 78.7 cents/lb |
| CC Index | 121.3 cents/lb | 119.8 cents/lb | 101.9 cents/lb |
| Indian Spot | 88.2 cents/lb | 87.4 cents/lb | 79.4 cents/lb |
| Pakistani Spot | 93.8 cents/lb | 93.5 cents/lb | 71.7 cents/lb |
The December NY/ICE contract followed the same pattern as July. The spread that existed between December and nearby prices was more than six cents/lb in February but has since closed completely.
The A Index rose from 84 to 95 cents/lb. Gains for the CC (China Cotton) Index 3128B slowed over the past month, rising from 111 to 121 cents/lb or from 16,700 to 18,200 RMB/ton. The RMB held near 6.80 RMB/USD. Indian prices rose from 82 to 88 cents/lb or from 59,400 to 65,800 INR/candy. The INR weakened slightly, from 92 to 96 INR/USD. Pakistani prices increased from 85 to 94 cents/lb or 19,500 to 21,500 PKR/maund. The PKR held near 279 PKR/USD over the past month.
Global Supply, Demand & Trade Forecasts
The May USDA report is the first to include a complete set of forecasts for an upcoming crop year. Relative to 2025/26, the USDA expects 2026/27 to bring lower production (–6.6 million bales to 116.0 million) and higher mill-use (+1.6 million bales to 121.7 million). This divergence is projected to result in a 5.7 million bale production gap.
Global stocks have been elevated in recent years but they would be pulled to their tightest level in six years if USDA forecasts are correct (77.3 million bales in 2025/26, 71.8 million in 2026/27, 71.2 million in 2021/22). The global stocks-to-use ratio is forecast to drop to 59.0%, which would be the lowest level since 2020/21 (when it was 58.4%).
| Region | 2024/25 | 2025/26 May | 2026/27 May |
|---|---|---|---|
| World Balance Sheet (million 480 lb. bales) | |||
| Beginning Stocks | 73.4 | 74.5 | 77.3 |
| Production | 119.3 | 122.6 | 116.0 |
| Mill-Use | 119.1 | 120.1 | 121.7 |
| Ending Stocks | 74.5 | 77.3 | 71.8 |
| Stocks/Use | 62.6% | 64.3% | 59.0% |
Country-Level Production Changes
At the country-level, the largest year-over-year country-level changes predicted for production are for China (–2.3 million bales to 33.5 million), Brazil (–2.0 million bales to 17.5 million), Australia (–1.5 million bales to 3.0 million), Turkey (–600,000 bales to 2.5 million), and the U.S. (–600,000 bales to 13.3 million). Forecast changes were smaller for India (+200,000 bales to 24.0 million) and Pakistan (–200,000 bales to 5.1 million).
Country-Level Mill-Use Changes
For mill-use, the largest year-over-year country-level changes are predicted for China (+500,000 bales to 41.0 million), India (+500,000 bales to 26.0 million), Bangladesh (+200,000 bales to 8.0 million), Pakistan (+100,000 bales to 10.4 million), Vietnam (+100,000 bales to 7.8 million), and Egypt (+100,000 bales to 1.3 million).
Global Cotton Trade Flows
Global cotton trade is forecast to decrease –400,000 bales to 43.4 million. The largest year-over-year changes in imports are expected for India (–2.2 million bales to 2.0 million), Pakistan (+500,000 bales to 5.3 million), China (+400,000 bales to 7.0 million), Vietnam (+400,000 bales to 8.0 million), and Turkey (+300,000 bales to 4.8 million). For exports, the largest changes are expected for Australia (–1.2 million to 4.5 million), India (+500,000 bales to 1.5 million), Brazil (+300,000 bales to 15.0 million), the U.S. (+300,000 bales to 12.3 million), and Turkey (–300,000 bales to 600,000).
Cotton Price Outlook & Speculator Positioning
Cotton prices continued to move higher over the past month, but the pattern has become more erratic. Alongside the increases in prices over the past several months, there was a significant shift in speculator positions. Speculators had been maintaining a net short position that set records for both its depth (in data for futures and options extending back to 2006, a low near 90,000 contracts was set in October) and duration (net short positions started in April 2024 and ended March 2026). The latest data on speculator net positions indicates that they hold a net long position of nearly 95,000 contracts. This implies a six-month swing all the way from record net short to a level near the net long position held in early 2024, which is the last time that prices reached a dollar per pound.
Speculator positions flipped from net short to net long around the onset of the Iran War. With polyester the primary competitor for cotton, and with polyester derived from oil, speculators could have been trading on ideas about increased cotton demand due to higher polyester prices. However, speculators had been reducing their short positions before the conflict. That process began in the last several months of 2025, when early projections for 2026/27 supply and demand tend to be formulated.
Early ideas about a production shortfall based on lower cotton acreage due to lower cotton prices in recent years could have led speculators to start trimming their short positions in late 2025. On top of the global outlook, there was also an announcement in December from Chinese officials of a structural change in support for cotton production in Xinjiang. The potential for lower Chinese production could support Chinese imports, and recent periods of higher Chinese imports have coincided with higher prices.
Supply-Side Risk Factors
Supply-side concerns may have also been magnified by the outbreak of the Iran conflict, given the concentration of fertilizer and natural gas exported out of the Persian Gulf. Higher fertilizer prices can cause lower application rates and contribute to lower yields. Simultaneously, the U.S. has remained dry in much of the cotton belt. Adverse growing conditions and the threat of higher U.S. abandonment could deepen concerns about global supply.
Demand-Side Headwinds
A counter point to supply-related arguments for tightness can come from the negative consequences the war might have on the demand side. Energy is an input to virtually everything in the modern global economy. As a result, higher energy prices can lead to inflation. Inflation, particularly for non-discretionary categories, like energy and food can inhibit spending on more discretionary goods, like textiles and apparel. It is unknowable how the conflict will evolve. But, it could be assumed that the longer the war lasts and the longer it impacts global oil, gas, and fertilizer markets, the greater the potential for it to shift the current set of cotton forecasts for 2026/27. A production shortfall has already been penciled in, and the extent that the current estimate either widens or contracts as the new crop year unfolds can be expected to influence price direction.
Key Takeaways for Textile Procurement
- Cotton prices reached 86.3 cents/lb (NY Nearby, May 12), up sharply from a 12-month average of 67.3 cents/lb — a significant shift for raw material cost planning.
- The USDA projects a 5.7 million bale production gap for 2026/27, with global ending stocks falling to 71.8 million bales.
- The global stocks-to-use ratio is forecast at 59.0% for 2026/27 — the lowest level since 2020/21 (when it was 58.4%).
- Speculators completed a record six-month swing from a net short near 90,000 contracts to a net long of nearly 95,000 contracts, reflecting a fundamental reassessment of the supply outlook.
- The Iran conflict introduces both supply-side risks (fertilizer costs, lower yields) and demand-side headwinds (energy-driven inflation, reduced apparel spending) that will shape cotton price direction through 2026/27.
Textile procurement teams should monitor USDA supply updates and futures market positioning closely as the 2026/27 crop year develops. The degree to which the production shortfall widens or narrows will be the decisive factor in cotton price direction.
Sources: Price data from Reuters, Cotlook, Cotton Assn. of India, and Karachi Cotton Assn. Supply, demand, and trade data from the USDA.
Disclaimer: The information contained herein is derived from public and private subscriber news sources believed to be reliable; however, Cotton Incorporated cannot guarantee its accuracy or completeness. No responsibility is assumed for the use of this information and no express or implied warranties or guarantees are made. The information contained herein should not be relied upon for the purpose of making investment decisions. This communication is not intended to forecast or predict future prices or events.
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Frequently Asked Questions
What are the current cotton price benchmarks as of May 2026?
As of May 12, the NY Nearby contract stood at 86.3 cents/lb, the A Index at 97.6 cents/lb, the CC Index at 121.3 cents/lb, Indian Spot at 88.2 cents/lb, and Pakistani Spot at 93.8 cents/lb. All benchmarks moved higher compared to both the prior month and the 12-month average.
What does the USDA forecast for global cotton supply in 2026/27?
The USDA's May report forecasts global production of 116.0 million bales for 2026/27, a decrease of 6.6 million bales relative to 2025/26. Mill-use is projected to rise to 121.7 million bales, creating a 5.7 million bale production gap. Global ending stocks are forecast to fall to 71.8 million bales, with a stocks-to-use ratio of 59.0%.
Why did speculator positions shift so dramatically in early 2026?
Speculators held a record net short position — a low near 90,000 contracts set in October — that lasted from April 2024 through March 2026. Early 2026/27 production shortfall projections, a December announcement of a structural change in Chinese Xinjiang production support, and the onset of the Iran War all contributed to the reversal. By May 2026, speculators held a net long of nearly 95,000 contracts.
How does the Iran conflict affect cotton market fundamentals?
The Iran conflict affects cotton prices from both sides of the supply-demand equation. On the supply side, the Persian Gulf concentration of fertilizer and natural gas exports raises the risk of higher input costs and lower yields. On the demand side, higher energy prices can fuel broader inflation, potentially reducing consumer spending on textiles and apparel.
Which countries show the largest cotton production changes for 2026/27?
The largest predicted production decreases are for China (–2.3 million bales to 33.5 million), Brazil (–2.0 million bales to 17.5 million), and Australia (–1.5 million bales to 3.0 million). India is the only major producer forecast to increase output, adding 200,000 bales to reach 24.0 million bales for 2026/27.
