Higher supply and pressure from buyers led cotton prices to drop over seven per cent in the Brazilian market in July. As for higher supply, it was due to the advanced harvesting of the 2017-18 crop. Some processors were trying to acquire only small amounts for prompt delivery, while others were focused on the delivery of the cotton previously purchased, which was still slow.

Several batches of cotton on sale had lower quality cotton, resulting in a fierce competition between purchasers and sellers regarding price and quality in July. As for future trades, agents were more active in the market in the first fortnight of July, when international quotes rose. Liquidity was higher in the domestic market and for exports, mainly for trades of batches from the 2018-19 crop.

At least 52.4 per cent of the 2017-18 production was traded, with 51.1 per cent allocated to the domestic market, 34.7 per cent for exports, and 14.3 per cent for flexible contracts, i.e. exports with an option to sell in the Brazilian market. About 75.9 per cent of the 2016-17 Brazilian crop has been harvested. Of this total, 62.3 per cent was allocated to the Brazilian market, 27.3 per cent to the international market, and 10.5 per cent to flexible contracts.