Brazilian cotton prices fall in August with higher supplies.

Brazilian cotton prices fell in August, driven by an increase in domestic supply, falling international prices, and improved export parity. This decline led to increased consumer interest and liquidity in prompt-delivery trades, as reported by CEPEA. The CEPEA/ESALQ cotton index dropped 4.65 per cent during the month, closing at BRL 3.8863 per pound on August 30. Meanwhile, the 2023-24 cotton crop harvest is progressing smoothly, with favorable weather conditions in key producing regions like Mato Grosso.

Despite the price drop, cotton exports from Brazil saw a significant fall in August by almost 53.5 per cent compared to the previous year. However, the daily export average slightly increased, indicating a more efficient export process. Overall, the Brazilian cotton market is currently experiencing a period of price volatility, driven by factors such as supply and demand dynamics, international market trends, and harvesting progress.