According to the latest forecast of the National Cotton Association of the United States (NCC), the planting area of long-staple cotton in the United States in 2024 is about 202,000 acres, an increase of 37.7%, using the average yield of long-staple cotton for nearly ten years, the total output of long-staple cotton in the United States in 2024/25 is expected to reach 538,000 packets (117,300 tons).

Egypt’s long-staple cotton production fell to 85,000 tons in the 2023 harvest season, compared with 125,000 tons last year, a 32% year-on-year decline. In 2024, with Egypt’s cotton exports remaining strong, farmers’ earnings significantly higher than feed and oil prices, and the Egyptian government’s planned 2023/2024 fiscal year for agriculture and irrigation investment in 71% year-on-year growth, Egypt’s cotton planting area is expected to rebound strongly. In addition, the planting area of China and India, two major long-staple cotton producing countries, is expected to show a momentum of warming in 2024, and there is a high probability of a “double harvest” pattern of area and total production.

According to industry analysis, the global long-staple cotton planting area in 2024 has rebounded significantly or for the following reasons:

First, the price comparison effect between long staple cotton and fine staple cotton is prominent, and farmers’ enthusiasm for maintaining and expanding long staple cotton planting is high. Such as the current Qingdao Port February/March shipment schedule of the United States Pima cotton 2-2 46/48 (strong 38/40GPT, 2023/24 new cotton) net weight quoted at 220-225 cents/pound, while the same shipment schedule 31-336/37 (strong 28/29GPT) net weight quoted at 101-102.5 cents/pound, The difference between the two is nearly 120 cents a pound. Since 2023/24, not only the purchase price of Xinjiang long-staple cotton is much higher than that of fine staple cotton, but also the quotation of long-staple cotton has left fine staple cotton far behind, and the income of farmers planting long-staple cotton is significantly higher than that of fine staple cotton.

Second, cotton is better and more prominent than corn, wheat, soybeans and other crops. From a statistical point of view, the price of new cotton futures (December 2024 contract) is 3.5 cents (4%) lower than the same period last year (December 2023 contract), but the price of corn futures in the same period in 2024 is down nearly 20% and soybean futures are down 13%. In addition, the volume of ICE cotton futures rose sharply during the Spring Festival, while corn and wheat futures were in a continuous falling channel, and the price effect of cotton was becoming more and more prominent. Of course, long staple cotton is more popular with farmers than fine staple cotton and other crops.

Third, recently, the western cotton region of the United States Pima cotton main producing area continues to welcome rainfall, soil moisture has been greatly improved, the abandonment rate will be significantly reduced than the previous two years, and the growth of long-staple cotton planting and output is expected to be strong. The latest forecast of the United States Oceanic and Atmospheric Administration shows that the drought situation in the southwest of the United States this year will be greatly improved, and the good trend will continue until at least May, the enthusiasm for cotton planting + weather help, the southwest cotton area and the western cotton area will not only greatly reduce the abandonment rate, but also increase the harvestable area in 2024, and the performance of long staple cotton will be a strong rebound.

Source: China Cotton Information Center