Brazil’s CONAB’s record cotton output forecast doesn’t shake May’s firm prices

Cotton prices in Brazil closed May on a firm note, due to limited supply during the offseason and producers maintaining steady quotations due to constrained stocks and recent international price trends, according to the Centre for Advanced Studies on Applied Economics (CEPEA). The CEPEA/ESALQ Index increased by 0.7 per cent between April 30 and May 30, reaching BRL 4.4176 (approximately $0.782) per pound.

Despite strong domestic prices, Brazil’s cotton exports saw a sharp decline in early May. Exports fell 34 per cent from April and 31.2 per cent year-on-year, totaling 157.7 thousand tons in the first 16 days of May. Cumulative exports for the 2024-25 season (August to May) reached 2.54 million tons, 5 per cent lower than the previous season, as reported in CEPEA’s latest fortnightly cotton market update.

On the production front, Brazil’s national supply agency, CONAB, forecasts a record cotton output of 3.9 million tons for the 2024-25 crop, marking a 5.5 per cent increase compared to 2023-24. This growth is supported by a projected 7.2 per cent expansion in planted area to 2.084 million hectares. However, productivity is expected to see a slight decrease of 1.6 per cent, settling at 1,874 kilograms per hectare.

These contrasting trends highlight Brazil’s strong domestic cotton market amid fluctuating export demand and promising production prospects for the upcoming season.