Brazil's cotton harvest progresses; prices remain firm

Abroad, price rises were linked to increasing oil values—which have been on the rise since April—and lower estimates for the world's ending stock, due to higher consumption and lower supply worldwide.

Many sellers were absent from the Brazilian spot market in the first half of the month, while some purchasers were interested in buying cotton. Sellers had cash flow, while the purchasers with urgent needs had to raise bids. It is important to highlight that term contracts are currently paying more than sales on the spot.

Between July 31 and August 15, the CEPEA/ESALQ Index for cotton rose by 4.11 per cent, to BRL 4.1106 per pound on August 15, CEPEA said in its latest fortnightly report on the Brazilian cotton market.

In a report released on August 10, CONAB (Brazil's National Company for Food Supply) estimated the national cotton area for the 2022-23 season at 1.66 million hectares, 3.6 per cent larger than that in the 2021-22 crop, but a slight 0.01 per cent smaller than the forecast in July. The national productivity was revised upward by 0.77 per cent compared to the previously estimated, and by 14.5 per cent compared to last season, to 1,827 kg per hectare, a record. Thus, Brazilian cotton output was revised upward by 0.76 per cent in the monthly comparison, and by 18.7 per cent compared to 2021-22, at 3.03 million tons, also a record.

Data from ABRAPA, the Brazilian Association of Cotton Producers, show that 52 per cent of the national cotton crop for the 2022-23 season had been harvested by August 11, and 18 per cent processed.

Fibre2Fashion News Desk (KD)