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Brazilian cotton prices expected to strengthen in 2017

18 Jan '17
1 min read

Brazilian cotton prices are expected to strengthen in 2017 from various factors including the smaller volume of harvested cotton from the 2015/16 crop and low ending stocks of the same crop. However, concentration of cotton with only a few agents, mainly trading companies may also bring uncertainties regarding cotton supply in the domestic market.

Quoting CONAB data, CEPEA said 2017 began with cotton inventories at only 162,900 tons, the lowest level since 2010/11 and although there is expected to be an increase in the 2016/17 crop, availability of cotton in the market is estimated at 1.6 million tons, a volume last observed in the 2009/10 season.

Cotton consumption is estimated at 750,000 tons in the 2016/17 season, up 4.2 per cent compared to the previous season, while exports are projected to drop 5.6 per cent as against 2015/16 and a steep 18.5 per cent vis-à-vis 2014/15.

A CONAB estimate also informs that there will be a decline of 5.5 per cent in 2016/17 cotton acreage to 902,300 hectares, which will be offset by a 16.1 per cent increase in productivity, which will result in 2016/17 cotton production expanding 9.7 per cent than in 2015/16. (AR)

Fibre2Fashion News Desk – India

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