Cotton/CEPEA: Supply and Demand Balance Maintains Stable Prices
According to the CEPEA research center at the University of São Paulo, the Brazilian cotton market is currently experiencing a balance between supply and demand. While some sellers of premium cotton maintain firm positions, demand shows little fluctuation, leading to stable spot prices and limited market liquidity. The Carnival recess also impacted trading, as companies monitor the performance of their manufactured goods. Cotton farmers are in the final stages of planting for the 2025/26 season.
According to the latest report from the Center for Advanced Studies on Applied Economics (CEPEA) at the University of São Paulo, the Brazilian cotton market is currently exhibiting a stable balance between supply and demand. The report indicates that while some sellers, particularly those with higher quality cotton, are maintaining firm positions, market demand has not shown significant fluctuations. This equilibrium has resulted in stable spot prices and, consequently, limited overall market liquidity.
CEPEA researchers further highlighted that the recent Carnival recess, coupled with logistical considerations, prompted some market participants to postpone their trading activities. Moreover, companies are closely monitoring the sales performance of their manufactured goods, such as textiles, which in many cases, continue to fall short of expectations.
Simultaneously, on the agricultural front, Brazilian cotton farmers are actively engaged in the final stages of planting for the 2025/26 season. The progress of this planting phase will have a significant impact on future cotton production and market supply.