Brazil Cotton Index expected to rise in upcoming period: TexPro

13 May '21

2 min read

Pic: casa.da.photo / Shutterstock.com

The Brazil Cotton Index (BCI) on sight price is expected to reach 98.50 cents per pound by July 2021. It was 80.67 cents per pound in January 2021 and surged by 9.42 per cent to reach 88.27 cents per pound in February. The price stayed between 88 and 89 cents per pound till April 2021 and is expected to rise by 11.02 per cent in July over the price of April.

The price is expected to move up in the upcoming quarter due to the rising international cotton prices, which is a result of a projected rise in the demand, and an expected drop in Brazil’s cotton production. Brazil's National Food Supply Company (CONAB) has estimated a drop of more than 15 per cent in its cotton production in marketing year 2020/21 (August to July) over the production in the previous year.

In February 2021, the cotton index in the country increased in the Brazilian market, supported by higher international demand, better exports pace and lower supply. In addition to this, sellers pushed up the prices after a large amount of the current season was sold. The uncertainties about the size of the new crop also drove up the prices of cotton.

The upward momentum of the index was hindered in March 2021 and first half of April 2021 due to the sudden rise in the COVID-19 cases and restrictions in the country. But the price of cotton started rising again in April 2021, according to Fibre2Fashion’s market analysis tool TexPro.

The cotton players are expected to increase the cotton valuations abroad. They also expect an impact of Brazil’s dry weather on crops development, mainly on the second crop. The sellers are focused on the delivery of existing orders despite poor stock and the buyers have agreed to pay higher prices to close deals.

Fibre2Fashion News Desk (KD)

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