Insights
- Brazil’s cotton spot market slowed in mid-September as sellers and buyers prioritised term contracts and shipments over fresh deals.
- The CEPEA/ESALQ cotton index fell 0.96 per cent from August 31 to September 15, as ICE Futures declines also weighed on buying interest.
- Conab sees a record 2025-26 crop and slightly higher 2026-27 output, while USDA lowered global production.
Brazil’s cotton spot-market trading weakened in mid-September as market participants concentrated on fulfilling term contracts and shipments, leaving limited appetite for fresh spot deals. Disagreements between buyers and sellers over prices and batch quality restricted transactions, which occurred only occasionally.
The decline in the first contracts traded at ICE Futures also discouraged business. The first four contracts moved down under pressure from lower international oil prices and a stronger dollar, factors that tend to discourage demand for US natural fibre.
Between August 31 and September 15, the CEPEA/ESALQ Index for cotton, with payment in eight days, fell 0.96 per cent and closed at BRL 432.27 (~$83.94) per lp on September 15, CEPEA said.
For the 2025-26 Brazilian crop, Conab data released on September 15, estimated cotton production at a record 4.144 million tonnes, 1.45 per cent above the previous report and 1.5 per cent higher than the previous crop. Conab attributed the increase to an upward revision in average yield, estimated at 2,053 kg per hectare, 1.44 per cent above the previous survey and 4.9 per cent higher than in 2024-25. Planted area was projected at 2.02 million hectares, stable compared with August 2026 but 3.2 per cent smaller than in the previous season.
Conab data showed nationwide harvesting had reached 95.6 per cent of the planted area by September 11, advancing 6.2 percentage points in the week and remaining slightly below the 96.6 per cent recorded in the same period last year.
For 2026-27, in a report released on September 15, Conab estimated cotton production at 4.1567 million tonnes, against 4.1438 million tonnes in 2025-26, and projected domestic consumption at 735,000 tonnes, exports at 3.411 million tonnes and ending stocks at 2.735 million tonnes in 2026-27.
In global supply and demand, US Department of Agriculture (USDA) data released on September 11, put 2026-27 world cotton production at 25.54 million tonnes, 0.3 per cent below the August projection and 3.8 per cent lower than in the previous crop. The USDA raised its Brazil estimate by 1.4 per cent to 4.028 million tonnes and cut its US projection by 3 per cent to 2.874 million tonnes, although those volumes were respectively 1.3 per cent and 5 per cent lower than in 2025-26.
USDA data kept global consumption stable from the previous month at 26.763 million tonnes, 1.5 per cent above the previous season and 4.78 per cent higher than projected production. Global trade was revised up by 1 per cent to 9.63 million tonnes. Compared with 2025-26, global imports are expected to fall 1.8 per cent and exports 3 per cent.
For Brazil, the USDA raised its export estimate by 1.3 per cent compared with August while keeping it at the same level as in 2025-26. World ending stocks were estimated at 15.210 million tonnes, 0.3 per cent above the previous projection but 7.2 per cent below the season before.
Source: https://www.fibre2fashion.com/