INDIA emerged as Australia’s largest cotton export destination during the month of August, a new report shows.
According to the latest market report from the Australian Cotton Shippers Association, August shipments saw “a notable increase” in exports to India, as anticipated after the removal of the 11% import duty.
India accounting for 28% of total shipments during the month, and up from 11% in July.
“While all other destinations declined relatively to make way for India, the biggest drop was China going from 51% down to 27%,” the ACSA’s Arthur Spellson said.
“This is symptomatic of the lacklustre demand we have seen from China (and most other markets) in recent months with macroeconomic weakness and geopolitical uncertainty continuing to weigh on downstream markets.”
Mr Spellson said just a few gins were still producing bales as the tail end of the 2026 season came to an end.
He said shipping volumes had remained steady with just over 550,000 bales exported in each of June, July and August.
Cumulative exports for the 2026/27 marketing year to date (March 2026 – February 2027) reached just over 2 million bales at the end of August, representing about 45% of the estimated 4.5 million bale crop.
“This leaves around 2.5 million bales of this crop yet to be shipped, in addition to any carryover stocks from the 2025 season,” Mr Spellson said.
“Given the size of last year's crop and export volumes in the 12 months to March 2026, this carryover could be significant. On that basis, as many as three million bales, a rough guess, are yet to be shipped.”
He noted the meeting between presidents Xi and Trump turned out to be a fizzer with no resulting purchases of US cotton by China.
“This, along with poor demand in general, resulted in a significant pull back in cotton prices during September,” he said.
The recent easing in prices is said to have encouraged some buyers to return to the market, although purchasing activity appeared largely confined to those with immediate supply requirements and consumers still seemed to be holding back.
“So, here we are with an excellent quality crop that is proving particularly difficult to market in the current environment.
“Fortunately, the market is paying carry (later months are higher priced than nearby), helping merchants offset holding costs and reducing the pressure to sell in the short term. Australia is going into a smaller crop and combined with adverse harvest conditions in the US and Brazil, this could see higher grades become increasingly difficult to source.”
Planting of the Australian 2027 crop is well under way and predictions are still around the three million bale level.