Cepea, October 2, 2020 – Cotton prices dropped by 6% in the first fortnight of September, reflecting the absence of purchasers in the Brazilian market in that period. Most of these agents were focused on processing the cotton from the 2019/20 crop and on the possible supply increase in Brazil.
In the second half of the month, quotes stabilized. Although a record output has been harvested in the 2019/20 season, sellers were not willing to lower asking prices, aware of the higher remuneration from exports than in the domestic spot market. Besides, cotton processing had not reached 50% of the volume harvested, keeping supply low in the spot.
In late September, values increased slightly, boosted by sellers, who were away from the market, aware of the dollar appreciation against Real and the faster exports pace compared to sales in the domestic market. In this context, liquidity was low in Brazil, and only small amounts were sold.
On Sept. 30, the CEPEA/ESALQ Index for cotton closed at 3.2275 BRL/pound, 2.5% down compared to that on August 31. However, the average in September closed at 3.1664 BRL/pound, 2.3% higher than that in August.
CROPS – Cotton processing in the 2019/20 crop had reached 51% of the total output until Sept. 24, according to Abrapa (Brazilian Cotton Producers Association).