Brazilian cotton prices rise on robust demand and global trends

November cotton prices in Brazil witnessed an uptick, due to strong seller quotations and higher demand for high-quality cotton. Positive global market dynamics too gave it a boost, says the Centre for Advanced Studies on Applied Economics (CEPEA).

Between October 31 and November 29, the CEPEA/ESALQ cotton index rose by 3.35 per cent, closing at BRL 4.0654 per pound. This was due to both domestic and international demand, as traders actively sought to fulfill term contracts and address immediate supply needs.

While Brazilian cotton exports saw a slight dip of 15.1 per cent in November compared to previous year, the daily average export volume saw a notable 21.3 per cent increase. This suggests a potential export volume of 292.3 thousand tons for the month.

Looking ahead to the 2024-25 season, the National Supply Company (CONAB) forecasts a 1.06 per cent increase in cotton production, reaching a record high of 3.704 million tons. The optimistic outlook is supported by an increase in cultivation area and improved productivity. Domestic cotton consumption is projected to rise by 1.43 per cent and exports are expected to grow, solidifying Brazil's position as a major player in the global cotton market.