Cotton prices drop in Brazilian market in June

05 Jul '21

2 min read

Pic: Shutterstock

Despite fading inventories due to the fast pace of exports for the last one year and higher demand in domestic market, prices of cotton in the Brazilian market dropped in June. At the close of the month on June 30, the CEPEA/ESALQ Index for cotton closed at 4.6913 BRL/pound, 7 per cent lower than that on May 31, according to Sao Paulo-based CEPEA.

June 2021 witnessed cotton supply in the Brazilian market at its lowest for June since 2018.

For months now, prices in Brazilian domestic market have been higher than the prices of cotton delivered to China. So, gradual adjustment is expected, CEPEA (the Center for Advanced Studies on Applied Economics) said in its latest fortnightly report.

"While some sellers are unwilling to lower asking prices, aware of the decrease in cotton inventories, purchasers are based on the price gap between the Brazilian and the international markets, the progress of the harvesting and the dollar appreciation against the Real. It is important to highlight that the interest of some agents in selling the product in the domestic market (which remunerates more than exports) helps to lower prices too," the CEPEA report said.

Meanwhile, harvesting of the new cotton crop has begun in Brazil. Until June 24, around 3 per cent of the total area was harvested, according to ABRAPA—the Brazilian association of cotton growers.

Fibre2Fashion News Desk (RKS)

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