Brazilian cotton prices have declined to a 16-year low due to a combination of factors, primarily centering on abundant supply and weak demand, both domestically and globally.

In real terms, the CEPEA/ESALQ Index for cotton (payment in 8 days) fell to its lowest level since September 2009 in November 2025, after six consecutive months of decline. The average price in November 2025 settled around BRL 3.4505 per pound (approximately $0.65). This price was about 12.5 per cent lower than the price in November 2024

A major global cotton producer and the world's leading exporter, Brazil has seen high production. This strong supply has flooded the domestic market, putting intense downward pressure on prices. By late November 2025, over 81 per cent of Brazil's 2024-25 crop had been processed. Local textile industries and domestic buyers are purchasing minimal volumes, operating at diminished capacity, and are cautious about new transactions.

Global cotton prices have also softened, and the CEPEA/ESALQ Index has remained below the export parity price, signaling little support from external markets. Producers facing cash pressure or needing to clear inventories have shown greater flexibility in accepting lower prices, which further adds to the downward momentum.

Activity in the spot market remains restricted, with most market participants focused on fulfilling existing long-term contracts. However, traders are already negotiating new deals for early 2026 and for the cotton from the next season. Low prices are tightening profit margins for Brazilian growers, making it difficult for many to break even, especially those with lower-than-expected yields.

In short, the strong harvest has created a surplus that the current weak global and domestic textile demand cannot absorb, leading to a sustained and sharp fall in prices.