Brazil'S Cotton Price Rises In The Context Of Tight Supply And Trade Uncertainty

In the first half of April, under the background of tight trade, the sentiment of the global cotton market was disturbed, and the fluctuation of futures prices affected the activity of the spot cotton market.

In Brazil, the mismatch between product quality and price continues to limit trade activities during the off-season. Most of the inventory in 2023/24 has been sold, and the remaining sellers stick to the price.

According to CEPEA, buyers with urgent needs or high quality requirements need to pay a premium.

Affected by this, the domestic cotton price in Brazil climbed to R $4.2999 or US $0.73 per pound on April 15, up 1.97% from March 31, the highest nominal level since the beginning of March.

According to the report released by Conab on April 10, the Brazilian cotton output in 2024/25 is estimated to be 3890800 tons, an increase of 5.1% year on year. The cotton planting area in Brazil in 2024/25 is estimated to be 2.0793 million hectares, up 6.9% year on year; The Brazilian cotton yield in 2024/25 is estimated to be 1871 kg/ha, a year-on-year decrease of 1.7%.

The supply and demand report of April previously released by the United States Department of Agriculture (USDA) shows that the global cotton production in 2024/25 is estimated to be 120.89 million bales, and 120.96 million bales in March. The final inventory of global cotton in 2024/25 is estimated to be 78.86 million bales, and 78.33 million bales in March.