The United States Department of Agriculture (USDA) has projected lower global cotton production and ending stocks, along with higher consumption, for the 2026–27 marketing year. The latest World Agricultural Supply and Demand Estimates (WASDE) report presents a bullish outlook, largely driven by tightening global cotton supplies.

As the May report marks the official debut of the 2026/27 forecast, all figures are being compared year-on-year (YoY) with the 2025/26 season. Such YoY comparison is standard for the May release, as it establishes the initial baseline for the new crop cycle before month-on-month tracking begins from June onwards.

United States Department of Agriculture (USDA) has forecast lower global cotton production and ending stocks, alongside higher consumption for 2026/27, indicating tighter global supplies.
The WASDE report projects world output at 116 million bales and consumption at a six-year high of 121.7 million bales, supported by higher synthetic fibre costs and stronger cotton demand.

According to the first report for next marketing year 2026-27, world cotton production is forecasted to decline by 5 per cent to 116.0 million bales of 480 pounds or 220 kg each. This production drop is attributed to lower output in major exporting countries, including Australia, Brazil, China, Pakistan, and the US, which is more than offset gains in India and Argentina. Conversely, the global consumption forecast is raised to a six-year high of 121.7 million bales. This demand surge is driven by an oil supply shock that has increased the cost of synthetic fibres, making cotton more price-competitive for global textile manufacturers.

The tightening market is further reflected in global ending stocks, which are projected to fall by 5.4 million bales to 71.8 million bales due to production shortfalls in key regions. In the export market, Brazil is expected to lead with 15 million bales, followed by the US at 12.3 million bales.

Meanwhile US cotton production for 2026-27 is projected at 13.3 million bales, down 600,000 bales from the 2025-26 season, while US ending stocks are also expected to move lower to 3.9 million bales. Reflecting these tighter supplies, the season-average farm price is forecast to rise significantly to 73 cents per pound, up from the 61 cents per pound recorded in the previous marketing year.

Fibre2Fashion News Desk (KUL)

American apparel company Kontoor Brands has reported stronger-than-expected first quarter (Q1) fiscal 2026 (FY26) results and announced plans to divest the Lee business.

Total revenue for the quarter ended March 2026, including discontinued operations, stood at $808 million. Revenue from continuing operations reached $613 million, supported by 4 per cent growth in Wrangler and 16 per cent growth in Helly Hansen on a pro-forma basis.

“Our strong first quarter results reflect the power of our operating model combined with strong execution,” said Scott Baxter, president, chief executive officer and chairman of Kontoor Brands. “Wrangler drove another quarter of broad-based growth and market share gains, and Helly Hansen delivered better-than-expected revenue and profitability.”

Kontoor Brands has posted stronger-than-expected Q1 FY26 results, driven by growth in Wrangler and Helly Hansen, and raised its full-year outlook.
Total revenue reached $808 million, while continuing operations generated $613 million.
The company plans to divest Lee, now treated as a discontinued operation.
Adjusted EPS guidance was raised to $6.6-6.7 for FY26.

Brand-wise, Wrangler global revenue increased 4 per cent year-on-year (YoY) to $436 million. Wrangler US revenue rose 1 per cent, aided by a 6 per cent rise in direct-to-consumer sales and a 1 per cent increase in wholesale revenue. International Wrangler revenue climbed 20 per cent, driven by strong direct-to-consumer and wholesale growth.

Helly Hansen generated $176 million in global revenue during the quarter, with sport and workwear segments contributing $120 million and $45 million respectively.

The gross margin from continuing operations on a reported basis improved 810 basis points to 53.7 per cent. Adjusted gross margin increased 470 basis points to 50.6 per cent, driven by the contribution from Helly Hansen, channel mix improvements and benefits from Project Jeanius, Kontoor Brands said in a press release.

Adjusted operating income from continuing operations rose 60 per cent YoY to $87 million, while adjusted earnings per share (EPS) from continuing operations reached $1.06. Total reported EPS, including discontinued operations, stood at $1.65.

The company said the Lee business is now being treated as discontinued operations after initiating a competitive divestiture process during Q1 2026. Kontoor expects to sign a definitive agreement for the sale in 2026, with multiple parties reportedly showing interest.

At the end of the quarter, Kontoor held $56 million in cash and cash equivalents and $1.14 billion in long-term debt. Inventory stood at $464 million, including Helly Hansen inventory.

The company additionally disclosed that it recognised a net receivable of $54 million linked to the expected recovery of tariffs previously paid under the US International Emergency Economic Powers Act (IEEPA), following a recent court ruling against the tariffs.

Raises FY26 Outlook

The company has raised its FY26 revenue outlook, including discontinued operations, to $3.41-3.46 billion from the earlier guidance of $3.40-3.45 billion. Revenue from continuing operations is expected between $2.66 billion and $2.71 billion.

Adjusted EPS guidance, including discontinued operations, has been revised upwards to $6.6-6.7 from the previous $6.4-6.5 range. Adjusted EPS from continuing operations is expected between $5.15 and $5.25.

“Our updated outlook reflects better than expected first quarter results and improving visibility for Wrangler and Helly Hansen,” said Joe Alkire, executive vice president, chief financial officer and global head of operations at Kontoor Brands.

Fibre2Fashion News Desk (SG)

Canada and Vietnam have recently agreed to further strengthen economic and trade ties as well as supply chain connectivity amid growing uncertainties in global commerce.

The issue was discussed at a meeting in Hanoi between Minister of Industry and Trade Le Manh Hung and Canadian ambassador to Vietnam Jim Nickel.

Canada and Vietnam have agreed to further strengthen economic and trade ties as well as supply chain connectivity amid growing global uncertainties.
The issue was discussed at a meeting between Minister of Industry and Trade Le Manh Hung and Canadian ambassador to Vietnam Jim Nickel, who highlighted Vietnam’s growing role in global supply chains.
The two sides discussed talks on the ASEAN-Canada FTA.

Bilateral trade has doubled over the past four years, rising by 18.8 per cent year on year to $8.6 billion in 2025.

Nickel highlighted Vietnam’s growing role in global supply chains, describing the country as a reliable supplier of goods to Canada which, in turn, has strengths in energy, critical minerals and agricultural products, according to a Vietnamese media outlet.

The ambassador also commended on Vietnam’s role as chair of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2026, host of the Asia-Pacific Economic Cooperation (APEC) forum in 2027, and its ASEAN rotating chairmanship later.

The two sides agreed to work closely on preparations for the third meeting of the Vietnam-Canada Joint Economic Committee and a bilateral business forum scheduled for early June 2026 in Canada.

The Vietnamese minister stressed that both countries’ participation in the CPTPP has generated practical benefits, helping boost trade, investment, business connectivity and supply chain linkages.

The two sides discussed negotiations on the ASEAN-Canada Free Trade Agreement (ACAFTA). Hung expressed confidence that once concluded and signed, the agreement will create fresh momentum for economic, trade and investment cooperation between the Association of Southeast Asian Nations and Canada.

Fibre2Fashion News Desk (DS)