Pic: Adobe Stock
In November, cotton prices in Brazil experienced a significant increase, driven by firm seller quotations and robust purchasing interest for high-quality batches at the month's end. This rise was further supported by global market trends, as per the Centre for Advanced Studies on Applied Economics (CEPEA).
Between October 31 and November 29, the CEPEA/ESALQ cotton index (payment in 8 days) rose by 3.35 per cent, closing at BRL 4.0654 (~$0.67) per pound on November 29.
The market dynamics were influenced by both domestic and international demands, as traders prioritised fulfilling term contracts as the year draws to a close. Despite this focus, there were still active negotiations to address immediate supply needs.
On the export front, Brazil reported a shipment of 215.4 thousand tons of cotton over 14 producing days in November, marking a 15.1 per cent decrease compared to November 2023. However, the daily average export volume saw a significant 21.3 per cent increase from the previous year, suggesting a potential total export volume of 292.3 thousand tons by the end of the month if the trend continues, CEPEA said in its latest fortnightly report on the Brazilian cotton market.
Looking ahead to the 2024-25 season, National Supply Company (CONAB) forecasts a slight increase in cotton production by 1.06 per cent to a record 3.704 million tons. This optimistic outlook is supported by a projected expansion in cultivation area and a modest rise in productivity. Additionally, cotton consumption within Brazil is expected to increase, with projections indicating a 1.43 per cent rise from October 2024 and a 2.16 per cent increase from the previous year. Exports are also set to grow, enhancing Brazil's position in the global cotton market.
Fibre2Fashion News Desk (KD)