Brazil’s cotton prices increase to one-year high amid strong global demand

Cotton prices in Brazil showed fluctuations in early March but maintained an overall upward trend, according to the Centre for Advanced Studies on Applied Economics (CEPEA). By mid-March, the CEPEA/ESALQ Index (payment in eight days) rose 1.92 per cent between February 28 and March 14, reaching BRL 4.2582 ($0.75) per pound, the highest level in a year.

Market players focused on securing long-term contracts, especially for exports, where prices were higher than domestic levels. Rising global cotton prices have strengthened sellers' confidence, prompting firm pricing strategies in the spot market. Meanwhile, demand remains steady, with buyers acquiring stocks for inventory replenishment and immediate production needs.

Brazil exported a record 274.63 thousand tons of cotton in February, according to Secex data, though shipments fell 33.9 percent from January. Over the past year, exports exceeded 2.9 million tons.

The International Cotton Advisory Committee (ICAC) projects global cotton production for 2024/25 at 25.688 million tons, up 6.52 per cent from 2023/24. Consumption is also expected to rise 2.27 per cent to 25.527 million tons, narrowing the supply-demand gap to just 0.63 per cent.