Cotton and fibre prices: what the outlook means for fashion costing

Cotton and synthetic fibre prices are climbing in 2026 after several years of subdued conditions, with the International Cotton Advisory Committee forecasting global cotton production at 25.9 million tonnes in 2026/27 and the Cotlook A Index ranging from 73 to 84 cents per pound for 2025/26, with a midpoint of 78 cents. USDA projections show global cotton prices rebounding to 90 cents per pound in 2026/27. The shift reflects structural tightening in both natural and synthetic fibre markets, with implications for fashion sourcing budgets, fabric mill contracts and inventory planning.

What is driving cotton prices higher in 2026?

Global cotton production is forecast at 25.9 million tonnes in 2026/27, exceeding consumption of 25.2 million tonnes, whilst global trade is expected to decline by 2.7 per cent and stocks to rise 4 per cent to 17.9 million tonnes. Despite a modest production surplus, world 2026/27 cotton ending stocks are projected at 71.8 million bales, 7 per cent lower than the previous year, with a 5 per cent reduction in global production from 2025/26.

According to ICAC estimates, the global cotton area is projected to contract by 1 per cent to 30.1 million hectares, whilst production is estimated to decline by 2 per cent to 25.7 million tonnes and global trade is expected to shrink by 1.4 per cent to approximately 9.5 million tonnes. Fertiliser prices rose by approximately 12 per cent in early 2026, primarily driven by tensions in the Middle East and supply disruptions in the Strait of Hormuz. ICAC notes that geopolitical friction in the Middle East could disturb fertiliser supply chains, potentially lifting costs for growers, whilst persistent drought across key producing areas in the United States is raising the possibility of higher crop abandonment.

Cotton is 0.81 per pound as of 12 October 2026, up 26.6 per cent from 0.64 a year earlier. The US seven market average spot price (41-4-34) stands at 75.08 cents per pound, up 8 points from the prior week and up from 60.88 cents per pound a year earlier.

How are synthetic fibre costs behaving?

Polyester, the dominant synthetic fibre in fashion, has experienced upward cost pressure driven by feedstock volatility and energy prices. Polyester filament yarn prices in China reached 996 USD per tonne in March 2026, rising sharply as demand from fabric mills and garment producers strengthened after seasonal restocking, whilst higher feedstock costs, especially from polyester chain inputs, added cost pressure across the market. US polyester staple fibre prices averaged 1.59 USD per kilogramme in Q1 2026, up 6.0 per cent from 1.50 USD per kilogramme in Q4 2025, with crude linked feedstock cost increases and insurance premiums raising landed costs.

On the synthetic fibre front, polyester and nylon costs saw a dramatic spike, driven by disruptions in global energy and oil markets, with polyester prices surging by 20 to 30 per cent within a matter of weeks in key manufacturing regions, directly tied to soaring crude oil prices. Crude oil traded above 100 per barrel, reaching its highest level in several months amid persistent geopolitical tensions and concerns over potential supply disruptions in the Middle East, with higher crude oil prices increasing the production cost of polyester fibre and thereby improving cotton's competitiveness against synthetic fibres.

What does the supply and demand balance look like?

Global cotton production is forecast at 116.0 million bales, nearly 5.5 per cent below 2025/26, whilst world cotton mill use is forecast to increase nearly 1.5 per cent in 2026/27 to approximately 121.8 million bales, the highest in 6 years. World cotton ending stocks are expected to decline as mill use exceeds production for the first time in 3 years, decreasing 5.1 million bales (7 per cent) from the previous season to 69.7 million bales, the lowest level since 2011/12.

China will remain the top producer and consumer, with Bangladesh leading imports. Bangladesh is expected to rank as the world's largest cotton importer, followed by Vietnam and China, benefiting from competitive production costs and a network of nearly 4,500 factories, with American and European Union retailers increasingly favouring the country as a sourcing hub, whilst rapid expansion of Bangladesh's spinning industry relies on large scale cotton imports to support production growth.

What are the price forecasts for the year ahead?

Price forecasts vary by source and region but point to a firmer environment than the 2023 to 2025 period. The following table summarises key benchmarks:

The 2026/27 upland cotton farm price is forecast at 78 cents per pound, 16 cents above the 2025/26 estimate. The US season average farm price for 2026/27 is raised 3 cents to 78 cents per pound. With reduced stocks, 2026/27 global cotton prices are expected to rebound from about 80 cents per pound recorded in the previous two seasons to 90 cents per pound.

What do mills and industry sources say?

Cotton Incorporated senior economist Jon Devine wrote in his monthly report for October that volatility was a feature of many markets and most benchmark prices moved sharply lower over the past month, noting that the December New York futures contract fell from levels near 1.05 in early September to those as low as 83 cents per pound in early October. Lower prices cure lower prices, with the production gap potentially why speculators are changing their bets and moving cotton prices up in 2026, as mill use and cotton consumption are expected to be higher in 2026/27 at 123 million bales.

In Q1 2026, cotton prices showed modest increases across major regions, with China prices rising 3.71 per cent from January to March, whilst India saw a 0.12 per cent rise, the USA recorded a 2.31 per cent increase, Germany also 2.31 per cent, and Canada 3.34 per cent. Price movements were influenced by strong demand from textile mills, cautious restocking, and anticipation of tighter 2026/27 global supply.

How should fashion businesses respond?

The convergence of tighter cotton stocks, rising polyester costs and freight volatility creates a more complex sourcing environment than the stable, low price years of 2023 to 2025. Brands and retailers face several tactical choices:

• Review fabric mill contracts to understand exposure to spot versus forward pricing and consider extending fixed price windows where margin pressure is acute.
• Adopt shorter planning horizons, buy now dye later fabric strategies, and flexible capacity across nearshore and offshore networks so volumes can tilt with currency moves and delivery promises, whilst multi origin cotton programmes, quality grade diversification, and hedging can absorb price shocks without stalling volume.
• Reassess cotton/polyester blend ratios in product development, noting that narrowing price spreads may shift the economics of natural versus synthetic content.
• Monitor fertiliser and crude oil markets as leading indicators for Q2 and Q3 2027 fibre costs, given the six to nine month lag between input cost movements and fabric pricing.
• Engage mills early on 2027 spring/summer fabric commitments, as capacity allocation may tighten if smaller producers exit during margin compression.

Overall, 2025 was another challenging year for the US cotton industry due to low prices, high production costs, and weak demand, with these same factors still impacting the US and world cotton outlook in the early months of 2026. Despite robust growth in total textile fibre consumption from 337 million bale equivalents in 2007 to 520 million in 2024, the increase has been dominated by man made fibres, reducing cotton's share from over 35 per cent to around 22 per cent over the past two decades. The 2026 price environment marks a shift from buyer friendly conditions to a more balanced, if volatile, market.

Researched and drafted with AI support, reviewed and released by the editorial team.

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