Brazilian cotton prices rise despite global dip.

In a mid-February twist, Brazilian cotton prices defied the international trend, rising 2.18 per cent to settle at BRL 4 per pound. This surge contrasts with steady global climbs, creating a wider gap between domestic and overseas prices. Here's a quick breakdown:

Domestic prices up: The CEPEA/ESALQ Index jumped 2.18 per cent, driven by strong export demand and limited domestic availability. Export parities also saw a 4.1per cent increase, reaching BRL 4.18 per pound.

Bucking global trend: Unlike the international market's upward climb, Brazilian prices rose due to specific factors like strong dollar, competitive exports, and harvest delays.

Exports drive growth: Brazilian cotton is proving competitive internationally, leading to robust export activity and pushing domestic prices up.

Production expansion expected: CONAB predicts a 12.8 per cent increase in cotton area and a 6.1 per cent rise in production for the 2023-24 season, potentially reaching a historic high of 3.288 million tons.

Global outlook: ICAC estimates a slight decrease in global cotton production, but consumption is expected to remain stable. This could create a potential supply shortage of 2.94 per cent.

In short, Brazilian cotton is experiencing a unique price surge driven by strong exports, domestic limitations, and an anticipated production increase. While the global picture shows a slightly different trend, Brazil's cotton market seems poised for growth.