Following a 35 per cent increase in cotton prices in 2015, Brazilian cotton prices continued to rise in 2016, in which they grew 22.6 per cent over 2015. Cotton prices were primarily driven by low cotton supply in the local market from an unexpected crop failure in the 2015-16 season, while firm demand also pushed up quotes in the last four months.
In 2016, the highest monthly average for the CEPEA/ESALQ Index, with payment in eight days, for cotton type 41-4, delivered in São Paulo was BRL 2.7405 or $0.7742 per pound in May, and the lowest at BRL 2.5023 or $0.7677 was observed in September.
According to data from the Brazilian Commodity Exchange (BBM), 71.7 per cent of the 2015/16 Brazilian cotton crop, estimated at 1.3 million tons, had been traded until December, of which 51 per cent was sold in the domestic market and the rest in the international market.