Cotton
ICE
The fiber that clothed the industrial revolution and once spiked to prices unseen since the American Civil War.
Top Producers
share of 2025/26 production
Top Consumers
share of 2025/26 mill use
Main Uses
world cotton fiber use by end product
Top Exporters
share of 2025/26 exports
Top Importers
share of 2025/26 imports
World production
roughly 25 million tonnes
as of 2025
Largest exporter
Brazil (since the 2023/24 season)
as of 2025
All-time futures high
$2.27 per pound (March 2011)
as of 2025
Xinjiang's share of world supply
roughly one fifth
as of 2025
Cotton is the world's dominant natural fiber, roughly 25 million tonnes a year, and the ICE Cotton No. 2 contract in New York, 50,000 pounds quoted in cents per pound, has priced it since 1870. The production map is a four-way race: China and India each grow roughly 5.5 to 6 million tonnes, mostly for their own mills; Brazil, whose safrinha-style second-crop cotton in Mato Grosso has exploded, overtook the United States as the world's largest exporter in the 2023/24 season; and the US, at roughly 3 million tonnes, remains the benchmark origin for quality and the delivery basis of the futures contract. Demand lives almost entirely in Asian spinning mills, China, India, Pakistan, Bangladesh, Vietnam, and Turkey, so cotton is a direct trade on global apparel consumption and mill margins.
Cotton's modern legend is the 2011 squeeze. Flooded crops in Pakistan and Australia, Indian export restrictions, and Chinese restocking drove the No. 2 contract to $2.27 per pound in March 2011, the highest price since the Civil War cotton famine of the 1860s, and the episode bankrupted mills and trade houses that had sold forward. China then spent 2011 to 2014 amassing a state reserve of more than 10 million tonnes, roughly half a year of world consumption, and its subsequent auction program overhung the market for years. The 2020s added a different kind of politics: the US Uyghur Forced Labor Prevention Act of 2022 effectively banned Xinjiang cotton, roughly a fifth of world supply, from US-bound supply chains, splitting the market into traceable and non-traceable fiber. Prices spiked to roughly $1.55 in 2022, then spent 2024 and 2025 in the 60s and 70s of cents under heavy polyester competition, weak mill margins, and large Brazilian crops.
How It Trades
| Venue | ICE Futures U.S. (New York) |
| Benchmark contract | Cotton No. 2 futures (CT) |
| Contract size | 50,000 pounds (roughly 100 bales) |
| Price terms | US cents per pound |
| Settlement | Physical delivery of US-grown, US-classed cotton at licensed warehouses in five southern US delivery points |
| Typical curve | Carry in surplus years; capable of violent inversions and squeezes into delivery, 2011 being the modern extreme |
| Liquidity | Liquid benchmark; roughly 25,000 to 40,000 contracts a day, with the on-call mill fixation system a unique squeeze mechanic |
Where It Trades
approximate share of global cotton futures volume, 2025
Supply and Demand
Top producers
- China: roughly 6 million tonnes, concentrated in Xinjiang
- India: roughly 5 to 5.5 million tonnes
- Brazil: roughly 3.7 to 4 million tonnes, the largest exporter since 2023/24
- United States: roughly 3 million tonnes, the futures delivery origin
- Pakistan, Australia, and Turkey: roughly 1 to 1.5 million tonnes each
West Texas dryland acreage gives the US crop high weather variance; Brazilian second-crop cotton has the strongest growth trend in world fiber.
Top consumers
- China (largest spinner)
- India
- Pakistan
- Bangladesh and Vietnam (fast-growing garment hubs)
- Turkey
Major uses
- Apparel yarn and fabric, the overwhelming use
- Home textiles
- Cottonseed crushed for oil and feed meal as a co-product
Fifty Years of Genetic Advances
| Era | Advance | How it changed the field |
|---|---|---|
| 1980s | Conventional and hybrid breeding | Higher-yielding, earlier-maturing varieties spread cotton and improved fiber length and strength for modern spinning. |
| 1996 | Bt cotton (Bollgard) | Monsanto Bt cotton built bollworm resistance into the plant, slashing the heavy insecticide spraying that defined cotton farming. |
| 1997 | Roundup Ready (glyphosate tolerance) | Glyphosate tolerance let growers spray over the top; stacked with Bt, it became the standard US and Indian cotton package. |
| Mid-2000s | Stacked traits and LibertyLink | Two-gene Bollgard II plus herbicide stacks managed resistance; Bayer LibertyLink added glufosinate tolerance as an alternative mode. |
| Roughly 2010 onward | Glyphosate-resistant weeds | Palmer amaranth overran glyphosate-only cotton across the US South, forcing a return to multiple herbicide modes of action. |
| Roughly 2015-2016 | XtendFlex (dicamba tolerance) | Bayer dicamba-tolerant cotton answered resistant weeds; off-target dicamba drift fueled the same litigation as in soybeans. |
| Roughly 2017 onward | Enlist (2,4-D tolerance) | Corteva Enlist cotton tolerates 2,4-D choline, glyphosate, and glufosinate, splitting acres with the dicamba systems. |
Cotton was one of the first transgenic crops; insect and herbicide traits now cover the great majority of US, Indian, and Chinese acres.
US Average Yield: Cotton
pounds per acre; USDA all-cotton lint yield, of which upland varieties are over 95 percent of acreage; yields hovered near 175 pounds for the first seven decades and now run roughly 800 to 950 pounds. Source: USDA NASS, Crop Production Historical Track Records (April 2026)
What Moves the Price
- Chinese reserve policy, import quotas, and mill demand
- US West Texas weather and abandonment rates
- Brazilian crop expansion and export pace
- Polyester prices, the synthetic substitute that caps cotton in weak demand
- Global apparel demand and retailer inventory cycles
- Indian minimum support prices and export policy
- Traceability rules: the Xinjiang ban and EU supply-chain legislation
- Unfixed on-call mill positions, a recurring squeeze accelerant
Moments That Made the Market
1870
The New York Cotton Exchange opens; the No. 2 contract's lineage begins.
1973
Cotton joins the great commodity inflation, trading near $1 per pound for the first time since the 1860s.
2008
A March futures squeeze ruins hedgers despite ample physical cotton, prompting CFTC scrutiny.
2011
The great squeeze: cotton reaches $2.27 per pound, the highest since the American Civil War.
2011-2014
China builds a state reserve above 10 million tonnes, then spends years auctioning it off.
2022
The Uyghur Forced Labor Prevention Act bars Xinjiang cotton from US supply chains; prices touch roughly $1.55.
2024
Brazil completes its rise, passing the US as the world's largest cotton exporter.
What Changed Since the 2010 Handbook Era
- Brazil overtook the US as the largest exporter, shifting the basis market toward Mato Grosso.
- Traceability politics split the market: Xinjiang fiber is excluded from Western supply chains.
- Polyester's cost advantage deepened, capping cotton demand growth in a way 2010 traders did not face.
- China swung from price-supporting reserve builder to opportunistic auctioneer and importer.
- Index-fund and algorithmic flows now dominate short-term price action over trade hedging.