Brazilian cotton output might again reduce in 2014-15, but would still be close to the average registered over the last 11 seasons. Worldwide, a decrease in supply is expected for the third time in a row, but despite that, ending stocks might continue to increase. In Brazil, prices will depend on export parity with international prices, export costs and exchange rate ratio and on the volume effectively shipped, which will determine domestic surplus.

Producers who are able to access the global market might obtain remunerative prices, especially if the exchange rate is higher than that observed in December. Since mid-2014, regional quotes are below the official price floor, and data indicates a tight situation, when revenue and costs of the new season are compared.

When comparing the same parameters like cost of inputs in November 2014 to export value in September 2014, profitability was six per cent positive. In spite of possible smaller area and production, considering prices, exports will be a major market definer in 2015, which can change the benefit/cost ratio.