Dollar's devaluation pushes Brazilian cotton prices down

“As for the production, while Brazilian players continue focused on completing 2025/26 sowing activities, producers in the Northern Hemisphere are starting to plan the 2026/27 crop, which is expected to be smaller than the current one,” the Sao Paulo-based Center for Advanced Studies on Applied Economics (CEPEA) said in its latest market release on cotton.

Between February 20 and 27, the CEPEA/ESALQ Index (payment in 8 days) moved up only 0.37 per cent, closing at BRL 3.5227 per pound on February 27. The US dollar fell by 0.81 per cent in the same comparison, to close at BRL 5.137.

In the international market, CEPEA calculations show that the export parity FAS (Free Alongside Ship) dropped 1.09 per cent from February 18-23, to BRL 3.3175/pound (USD 0.6419/pound) at the port of Santos (SP) and to BRL 3.3280/pound (USD 0.6440/pound) at the port of Paranaguá (PR). The Cotlook A Index moved up 0.41 per cent in the same period, closing at USD 0.7415/pound. The US dollar decreased 1.47 per cent against the Real, closing at BRL 5.168.

Meanwhile, Brazil exported 218,700 tons of cotton in 13 producing days of February, with a daily average at 16,800 tons, against 13,700 tons one year ago (+22.5 per cent). “If this pace continues, the monthly volume is likely to hit 300,000 tons, more than the 274,600 tons recorded in February 2025,” CEPEA said.

In the 2025/26 season so far (from August 2025 to February 2026), the volume shipped is closed to 2 million tons, according to data from Secex, the Foreign Trade Secretariat of Brazil.

For the 2026-27 season, the US Department of Agriculture (USDA) has projected the global cotton production to hit 25.3 million tons, down 3.2 per cent compared to the previous season. The consumption is estimated at 26.2 million tons, up 1.2 per cent, surpassing the output and reducing final stocks to 15.5 million tons (-5.2 per cent).

Fibre2Fashion News Desk (RKS)