Brazilian cotton prices resume decreasing trend

Between July 24-31, the CEPEA/ESALQ Index for cotton type 41-4 dropped 2.1% and closed at 2.0888 real (0.9169 dollar) per pound on July 31. In the accumulated of July, however, there was a slight increase of 0.9%.

Some dealers were more flexible regarding prices. These agents were receiving the contracted product below current quotes; therefore, they offer cotton to the industry at smaller values and/or longer due dates.

Part of companies, in turn, was supplied in late July. As a result, these players were unwilling to close new trades. Many purchasers were expecting more significant price decreases of cotton, as the harvesting advanced.

Producers, in turn, continued focused on the harvesting, cotton ginning and exports. It is worth noting that low temperatures in many Brazilian regions in late July halted the harvesting in some farms.

Center for Advanced Studies on Applied Economics (CEPEA)