The China-US trade war has adversely impacted the world cotton market. The trade war not only impacts the raw cotton market, it shifts the buying logistics for cotton yarn and the fabric markets as well. When the cotton market falls, demand is usually stimulated. Futures prices have moved with the progression of the trade war. For some reason, this drop in the futures market hasn’t stimulated that demand.

China needs cotton. In 2014, its stocks were approaching 67 million bales, of which 51 million were reserves. Those reserves have been reduced. Chinese cotton buyers are loving the huge crop Brazil had last year. Brazilian cotton producers grew 12.8 million bales of fiber — averaging almost 1,500 pounds an acre-- in 2018. From 2014 to 2016, Brazil was harvesting only six million to seven million bales but is anticipated to press 12 million bales this year. Brazil consumes only 3.7 million bales domestically, so much of its cotton is aimed at the export market. In 2016, Brazil exported 2.8 million bales, but this year is anticipating shipping over eight million bales. This has put a damper on Chinese demand for US cotton. Brazil will ship more cotton to China — once the United States’ largest cotton customer.