Brazilian cotton production set to soar despite productivity dip

According to the latest data from the National Supply Company (CONAB), Brazil's cotton output is anticipated to hit 3.6 million tonnes this season, an increase of 1.12 per cent from March's forecast and 13.4 per cent higher than the previous year. Although productivity may see a marginal decrease of 2.5 per cent, amounting to 1,860 kilos per hectare, the expanded cultivation area of 1.94 million hectares, up by 16.3 per cent, is expected to ensure a record harvest.

While domestic consumption is projected to decrease by 2.7 per cent to 710 thousand tonnes, it still marks a 4.4 per cent rise from the 2022-23 season. Exports are also on a robust path, likely reaching 2.715 million tonnes, which represents a 9.5 per cent month-on-month increase and a staggering 67.8 per cent growth compared to the previous crop, CEPEA said in its latest fortnightly report on the Brazilian cotton market.

In the domestic market, cotton prices continue to fluctuate. Price increases are driven by sellers holding firm, while decreases are influenced by buyer pressure. This ongoing disparity in pricing and product quality between parties is causing a slowdown in spot market transactions.

The CEPEA/ESALQ Index, a benchmark for cotton prices in Brazil, fell by 1.83 per cent between March 28 and April 15, closing at BRL 4.0145 per pound as of April 15.

Furthermore, export data from the Foreign Trade Secretariat (SECEX) indicates that from August 2023 to March 2024, cotton shipments have already exceeded 30 per cent of the total exports recorded from August 2022 to July 2023, underscoring a strong performance in the international markets.

Fibre2Fashion News Desk (KD)