Even with the decreasing cotton prices, Brazilian imports keep increasing. According to Secex, until August 17th, domestic imports reached 2.383 million dollars (daily average), up 10.2 percent from July/08 and 260 percent in relation to Aug/07. Between July 31st and August 29th, the CEPEA/ESALQ Index for the type 41-4 (delivered in Sao Paulo city, payment in 8 days - the most common commercialization in Brazilian market) dropped 4.9 percent in Real, closing at 1.1941 real or 0.7326 dollar a pound on Aug 29th.
According to USDA, the global cotton production should total 24.4 million tons in 2008/09 crop (against 26 million in 2007/08 crop) and the consumption, 27.12 million (in 2007/08, it was of 26.917 million). Even though, the international trades are forecasted to rise to 8.6 million tons (against 8.3 million). The global inventories, in turn, should reduce to 11.1 million tons, representing roughly 41 percent of the annual consumption. Even with the reduction, the volume is still considered high.
In the domestic market, some cotton growers, in need of cash, accepted to trade at lower values during August. Other ones, however, kept retreated, focused on accomplishing anticipated contracts. (Cepea - Brazil)