Crop is progressing, but prices are decreasing

After being stable for almost one month, Brazilian cotton prices started a downward trend in July. The pressure came from over supply as harvest evolved in the Middle West and Northeast of Brazil. Some growers have been trading higher volumes to generate cash. Until July 11th, the CEPEA/ESALQ Index decreased 2.4 percent, to values around 0.60 dollar a pound. In general terms, however, most of the growers are meeting contracts, both for exports and for domestic market.

Cotton exports have been slow, with very few deals being closed, since export prices are much lower than domestic ones. Price parity calculated by Cepea is around 0.97 real a pound.

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