Yemisi Izuora
Cotton prices reportedly reached about 80.5 cents a pound in July 2026, up 35 per cent from their February low.
The African Export-Import Bank (Afreximbank) says African exporters can capture more value from the recovery by raising yields, improving logistics and expanding local textile processing.
According to a report published by the Bank, the recent recovery has created a new opportunity for African countries that can raise yields, build competitive local processing industries and improve logistics capacity.
The report, titled “Cotton: A Global Recovery and Africa’s Opportunity,” identifies cotton as one of the strongest-performing agricultural commodities during the first half of 2026. Front-month cotton futures traded at about 80.5 cents a pound in July, representing a 35 per cent increase from the low recorded in February.
The price recovery marks a break from the prolonged downturn that began in 2023. However, prices remain below the historic peaks recorded during the post-pandemic commodity supercycle.
Several factors have supported the rebound. First, global production should decline after exceptionally strong harvests in the 2024/25 and 2025/26 seasons.
The U.S. Department of Agriculture (USDA) expects global cotton production to fall to 116 million bales in 2026/27 from 122.7 million bales in the previous season, representing a 5.5 per cent decline.
At the same time, global mill consumption should rise to about 122 million bales in 2026/27. This imbalance should push demand above production and reduce global ending stocks to their lowest level since the 2018/19 season.
China remains the largest driver of global fiber demand, although textile industries in India, Bangladesh, Pakistan and Vietnam continue to expand rapidly. China alone accounts for more than one-third of global mill consumption.
The USDA expects Chinese mill use to reach 41.5 million bales in 2026/27, its highest level since 2010/11. Rising domestic consumption, inventory rebuilding and resilient textile production should support that increase.
Beyond traditional supply-and-demand dynamics, 2026 has highlighted a stronger link between cotton and global energy markets. Cotton competes with polyester, a major substitute that relies on petroleum derivatives. Oil and naphtha prices therefore influence the relative attractiveness of cotton.
Population growth, urbanization and rising incomes have historically increased global demand for fibers. However, synthetic fibers have captured most of that growth because advances in polyester production, new applications and structurally lower production costs have strengthened their position.
Chemical fibers accounted for nearly 80% of global fiber consumption in 2025, compared with just over 20% for cotton. However, higher energy prices in 2026, following tensions around the Strait of Hormuz, increased polyester production costs and temporarily improved cotton’s competitiveness.
The report also points to drought in the U.S. Cotton Belt as another factor supporting tighter supply expectations. Dry conditions reduced expected yields and lowered export forecasts. Although early-summer rainfall provided some relief, crop conditions remained below historical averages, and U.S. production should fall from the previous season.
Other major exporters have also faced downward revisions to their production outlooks, although India should maintain stable output. Brazil remains a major exception.
Brazil has overtaken the United States as the world’s largest cotton exporter. Its large-scale commercial farming, optimized logistics and competitive production costs have strengthened its position. The country could post another record export volume in 2026/27 and further consolidate its position in the global market.
Against this backdrop, higher cotton prices could increase export revenues for African producers. However, stagnant or declining output in major producing countries such as Chad, Cameroon and Mali limits the continent’s ability to fully capture the market recovery.
Climate shocks, higher input costs and productivity challenges have constrained production and reduced exportable surpluses in these markets.
The three countries are expected to produce about 1.3 million bales in the current season, down from 1.9 million bales in 2021/22.
Despite these constraints, cotton from several West African countries, including Benin, Burkina Faso, Côte d’Ivoire and Mali, remains highly sought after by Asian spinners because of its quality, traceability and low contamination levels.
African producers also face intense competition from Brazil. The South American country benefits from large production volumes, integrated logistics infrastructure and the ability to guarantee large and reliable shipments.
Afreximbank says Africa must act on three fronts to remain competitive over the long term: raise yields, improve supply-chain efficiency and expand local processing capacity. The bank specifically points to investments in spinning and textile and apparel manufacturing.
The Glo-Djigbé Industrial Zone in Benin offers an example of that strategy. The 1,640-hectare economic hub could increase the value generated by Benin’s cotton exports from about $40 million as raw fiber to as much as $800 million when manufacturers convert the fiber into finished garments.