Index rises and surpasses 5.00 BRL/pound in Brazil

Cepea, May 3, 2021 – Cotton prices are on the rise in the Brazilian market. In late April, quotes surpassed 5.00 BRL per pound, level that was last observed in early March. The current prices offset the losses registered between the second fortnight of March and the first days of April, when lower demand pressed down quotes, influenced by the uncertainties caused by the new restrictive measures related to the covid-19 pandemic.


The valuations registered in April were majorly linked to sellers’ firm stance regarding asking prices. These agents are aware of cotton valuations abroad, the dry weather in Brazil – which may hamper crops development, mainly the second crop –, and sowing in the United States. Besides, some sellers were focused on delivering the product previously purchased, making only a few batches available in the spot market.


As regards demand, the purchasers with urgent needs agreed to pay higher prices for cotton in order to close deals. However, some of these agents were away from the market, working with the product in stock.


Between March 31 and April 30, the CEPEA/ESALQ Index for cotton rose by 7.5%, closing at 5.1702 BRL/pound on April 30, the highest nominal level since March 8.


EXPORTS – The Brazilian cotton exports were at a fast pace in April, totaling 144.7 thousand tons in the first 15 working days of the month, according to data from Secex (Foreign Trade Secretariat). This volume is 60% higher than that exported in April 2020 (90.6 thousand tons). The daily average of shipments was 9.6 thousand tons, much higher than the 4.5 thousand tons/day in April/2020.




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