The agricultural products market saw divergent trends in 2024. While products such as cocoa, coffee, frozen orange juice and rubber performed well, cotton again suffered heavy losses. At the end of the year he lost 14% of its value, stabilizing at 68.4 cents per pound after a slight recovery in February, when prices temporarily crossed 100 cents.
This fall adds to a downward trend that has lasted for three years, with a decrease of 3% in 2023 and 26% in 2022. This decline marks a hardening of the situation for cotton, which continues to struggle in the face of excess supply and fragile demand. The decline in cotton prices is mainly caused by excess production and disappointing demand. In West Africa, production rebounded after a difficult year in 2022/2023, while in Brazil, the world’s largest exporter, the harvest reached a record 2.6 million tonnes in 2023/2024, surpassing the United States. At the same time, demand has stagnated, especially in Chinethe world’s largest importer. There, tough economic conditions, coupled with a strengthening dollar, have made cotton less attractive to buyers. High cotton prices also helped limit purchases, exacerbating weak demand. The outlook for 2024 remains worrying, with global production potentially reaching 26 million tonnes, increasing global stocks to record levels of 16.9 million tonnes.
The forecasts for 2024/2025 do not suggest significant improvements. Chinese imports are expected to fall by 47% compared to the previous year, representing only 1.72 million tonnes. This drop in Chinese demand could put further pressure on cotton prices, as China accumulates a record stockpile of 8.1 million tonnes. In addition, competition from polyester, made from petroleum, is increasing. With a possible increase in oil production, particularly in North America and the countries of OPECpolyester could become even more competitive compared to cotton. Indeed, polyester is already the most used fiber in the textile industry and its production could further increase if oil prices fall, thus widening the gap between the two materials.
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