Brazil’s CEPEA/ESALQ cotton Index declined 1.05 per cent between September 30 and October 30 to BRL 4.1302 (approximately $0.76) per pound, despite recovering 1.7 per cent in the final week of October, from October 26 to 30, according to the Centre for Advanced Studies on Applied Economics (Cepea).
Brazil’s cotton prices fell 4.47 per cent month on month in October 2026 amid weak demand and cautious trading, although a weaker real supported a late-month recovery.
Global cotton production is forecast to decline 4 per cent in 2026-27 to 25.75 million tonnes, while consumption is expected to rise 0.8 per cent to 26.1 million tonnes, creating a projected supply deficit of 353,000 tonnes, ICAC said.
For most of October, Brazil’s domestic cotton market was characterised by low liquidity, cautious trading and declining prices. Sellers concluded occasional deals while prioritising the fulfilment of forward contracts, whereas textile industry participants relied on existing stocks and previously contracted volumes rather than making fresh purchases. Weak demand across the textile production chain, coupled with political and economic uncertainties, further dampened market activity, Cepea said.
Towards the end of the month, a sharp appreciation of the US dollar against the Brazilian real strengthened export parity. Domestic prices, which had remained above export parity for most of October, fell below the reference level on October 26. Sellers subsequently maintained firm asking prices, supporting a recovery in domestic quotations. Higher international prices also encouraged market participants to enter into new forward contracts, particularly for exports involving cotton from the 2025-26 and 2026-27 crop seasons.
On average, domestic cotton quotations were 1.3 per cent above export parity in October. However, in the final week, they traded 3.8 per cent below the reference level, Cepea said.
The CEPEA/ESALQ Index averaged BRL 4.1090 (approximately $0.75) per pound in October, down 4.47 per cent from September 2026 but up 12.52 per cent year on year in real terms, with values deflated by the IGP-DI index to September 2026 levels.
In US-dollar terms, the spot Index averaged $0.7995 per pound, 1.4 per cent above the average of the first contract traded on the Intercontinental Exchange (ICE) Futures in New York, at $0.7882 per pound. However, it was 11.9 per cent below the Cotlook A Index average of $0.9078 per pound. The Cotlook A Index serves as an international benchmark for cotton lint delivered to the Far East, Cepea said.
The US dollar appreciated 5.41 per cent against the Brazilian real in October, closing at BRL 5.453 per dollar on October 30. This supported the export parity (FAS) calculated by Cepea, which increased 1.5 per cent during the month to BRL 4.2650 (approximately $0.78) per pound at the port of Santos in São Paulo state and BRL 4.2755 (approximately $0.78) per pound at the port of Paranaguá in Paraná state. In dollar terms, the respective values stood at $0.7821 and $0.7841 per pound.
The increase in export parity came despite a 3.75 per cent decline in the Cotlook A Index over the same period, to $0.8985 per pound at the end of October.
Meanwhile, global cotton production is forecast to reach 25.75 million tonnes in the 2026-27 crop season, down 4 per cent from the previous season, mainly due to lower output in China, Brazil, Pakistan and the US, according to data released by the International Cotton Advisory Committee (ICAC).
Global cotton consumption is projected to increase 0.8 per cent to 26.1 million tonnes, supported primarily by activity in Asian textile industries, particularly in China, India, Pakistan, Vietnam and Turkiye.
With consumption expected to exceed production by approximately 353,000 tonnes, the global cotton market is forecast to shift from a surplus in 2025-26 to a deficit in 2026-27, potentially resulting in a reduction in global stocks, ICAC data showed.
Global cotton exports are projected to decline 1.7 per cent to 9.75 million tonnes. Brazil is expected to retain its position as the world’s leading cotton exporter in 2026-27, with shipments forecast at 3.15 million tonnes, followed by the US at 2.71 million tonnes.
Fibre2Fashion News Desk (CG)
