Insights

• Brazil's cotton market saw higher liquidity in mid-August as prices eased to May levels, boosting domestic sales.
• The CEPEA/ESALQ Index fell 2.9 per cent to BRL 4.0140/lb by Aug 15.
• Harvest progress lagged, with 33.56 per cent complete by Aug 7, below averages.
• Globally, ICAC projects 2025/26 output at 25.91m tons, up 1.55 per cent, with consumption at 25.56m tons, slightly below supply.

Liquidity in Brazil’s domestic cotton market increased in mid-August, with more trades of term contracts as both buyers and sellers sought to close deals. Prices eased slightly due to lower export parity, returning to levels last seen in May 2024, making domestic sales more attractive, according to Centre for Advanced Studies on Applied Economics (CEPEA).

The CEPEA/ESALQ Index (payment in 8 days) dropped 2.9 per cent between July 31 and August 15, closing at BRL 4.0140 per pound on August 15.

According to Abrapa, 33.56 per cent of Brazil’s 2024/25 cotton crop had been harvested by August 7. In Mato Grosso, the country’s top producer, the harvest reached 27 per cent, while in Bahia it stood at 40.56 per cent, CEPEA said in its latest fortnightly report on the Brazilian cotton market.

Conab data showed 29.7 per cent of the national crop was harvested by August 2, lagging behind 36.7 per cent a year earlier and the five-year average of 46.1 per cent. In Mato Grosso, 20.9 per cent was harvested, well below the 31.8 per cent recorded last year and the 41.4 per cent five-year average.

Globally, the International Cotton Advisory Committee (ICAC) projects cotton acreage in 2025/26 at 31.3 million hectares, with average yields of 827 kilos per hectare. World production is expected to reach 25.912 million tons, a 1.55 per cent increase from the previous season.

Consumption is estimated at 25.564 million tons, 0.26 per cent higher than in 2024/25, though still 1.34 per cent lower than global supply.