After significantly decreasing in the previous month, cotton prices in Brazil were firm again in early April. The CEPEA/ESALQ Index changed from the record 5.22 BRL per pound on March 4 to 4.76 BRL/pound on April 5. Since then, the Index has been recovering, the Center for Advanced Studies on Applied Economics (CEPEA) said in its latest fortnightly report.
Between March 31 and April 15, the CEPEA/ESALQ Index for cotton rose 1.05 per cent, closing at 4.8593 BRL/pound on April 15.
During the fortnight, sellers were focused on international price rises and estimates of lower production in Brazil and a possible export record. Therefore, they were firm in the first fortnight of the month, which sustained prices. Moreover, some of these players expect a demand increase in the coming periods, given that the cotton industry has not been purchasing the product for immediate delivery since early March, the report said. “As for the demand, only purchasers who have short-term requirements and/or are willing to replenish inventories are operating.”
Meanwhile, Brazil’s National Food Supply Company (Conab) indicated that the 2020-21 cotton area may total 1.41 million hectares, 15.2 per cent down compared to 2019-20. Productivity is forecast at 1,764 kilos per hectare, a decrease of 2.1 per cent compared to the previous season. Thus, production is likely to amount to 2.49 million tons, a sharp 16.9 per cent down compared to the previous crop.
A report released by the US department of agriculture (USDA) on April 9 said Brazil’s cotton inventories for 2020-21 are forecast at 2.7 million tons, down 13.7 per cent from the previous season’s inventory.
SOURCE: Fibre2Fashion
