Brazil's cotton export growth is shifting from a sprint to a steady cruise. Data from Brazil's Secretariat of Foreign Trade (Secex) shows that in the first four weeks of July, daily cotton exports averaged 7,090 tons, up 28% year-on-year from the full-month daily average in July 2025. However, this growth rate is significantly lower than the 50% to 63% year-on-year increases recorded from April to June 2026. For global textile raw material buyers, these figures signal a subtle but important shift in supply-demand dynamics.
Export Growth Stepping Down
Brazilian cotton export increments peaked in Q2 2026: April saw a 54.85% year-on-year increase, May 51.5%, and June 63%. July's 28% is still high, but the deceleration trend is clear. In absolute terms, the first four weeks of July totaled 127,650 tons, close to the full-month volume of 127,250 tons in July 2025. However, the daily average tells a more nuanced story: June's daily average was about 7,100 tons, and July's is roughly flat, breaking the previous pattern of month-on-month increases.
This "high-level plateau" suggests that Brazil's exportable surplus is narrowing, or that international buyers are becoming more cautious on price expectations and inventory management. For Brazilian growers and exporters, the window for clearing the bumper 2025/2026 crop is closing; for buyers, the era of "buy anytime at a good price" may not last much longer.
Impact on International Cotton Prices
The slowdown in Brazilian cotton exports helps ease short-term supply pressure on the global market. In previous months, massive Brazilian shipments depressed ICE cotton futures, competing with US and Indian cotton. Now that marginal supply growth is moderating, it supports a floor under international prices.
However, the 28% growth still means Brazil shipped about 28,000 more tons of cotton in July compared to last year. These incremental volumes mainly went to Southeast Asian mills and China. Chinese customs data shows that in H1 2026, China's imports from Brazil surged over 40% year-on-year, making Brazil the top supplier to China, surpassing the US. With the July slowdown, Chinese buyers may need to reassess the cost-effectiveness of US and Indian cotton.
Strategic Adjustments for Chinese Textile Mills
For Chinese cotton textile mills, the slowing Brazilian export growth implies two things: first, the procurement model relying on "large volume at low prices" needs fine-tuning; second, the window for inventory management is narrowing.
Mills in Shandong, Henan, and Jiangsu—key cotton textile clusters—ramped up Brazilian cotton purchases in Q2, with some locking in Q3 shipments. As July exports slow and the new US crop comes to market, buyers must watch for potential short-term supply tightness, especially in high-grade cotton. Brazil's export mix is shifting from primarily carded grades to a higher share of combed grades, which will likely push up premiums for quality cotton.
Additionally, RMB exchange rate fluctuations and domestic reserve auction schedules must be factored in. If Brazilian cotton arrivals dip seasonally in August-September while state reserve releases do not accelerate, the current wide domestic-international cotton price gap could narrow or even invert.
Implicit Signals for the Global Textile Supply Chain
The slowdown in Brazilian cotton exports is not just about one commodity; it reflects a broader restructuring of global textile raw material supply chains. Over the past two years, Brazil rapidly filled the gap left by US cotton due to drought and trade frictions, leveraging area expansion and yield gains. But this process is not linear—logistical bottlenecks (Santos port congestion, rising inland freight) and rising production costs are capping further expansion.
For textile-exporting countries like Vietnam and Bangladesh that rely on imported cotton, the Brazilian slowdown underscores the need for supply diversification. Indian cotton exports have decreased due to stronger domestic demand, US cotton output is recovering but quality issues persist, and West African cotton remains constrained by scale. Global cotton trade is entering a new phase of "multi-polar but unstable."