Cepea, April 16, 2021 – After moving down significantly for one month, cotton prices were firm again in early April. The CEPEA/ESALQ Index changed from the nominal record, 5.22 BRL per pound on March 4, to 4.76 BRL/pound on April 5. From this day onwards, the Index has been recovering. Between March 31 and April 15, the CEPEA/ESALQ Index for cotton rose 1.05%, closing at 4.8593 BRL/pound on April 15.
Sellers were focused on international price rises and estimates of lower production in Brazil and a possible export record. Therefore, they were firm in the first fortnight of the month, which sustained prices. Moreover, part of these players expect a demand increase in the coming periods, given that the cotton industry has not been purchasing the product for immediate delivery since early March. As for the demand, only purchasers who have short-term requirements and/or are willing to replenish inventories are operating.
CONAB – The report released on April 11 by Conab indicated that the 2020/21 area may total 1.41 million hectares, 15.2% down compared to the 2019/20. Productivity is forecast at 1,764 kilos per hectare, for a decrease of 2.1% in relation to the season before. Thus, production is likely to amount 2.49 million tons, sharply 16.9% down comparing the previous crop.
USDA – The report released by the USDA on April 9 reported that the 2020/21 world production may shrink 7.4% compared to the previous, at 24.61 million tons. Global consumption, in turn, is likely to increase 14.5%, at 25.66 million tons. As a result, 2020/21 world stocks may total 20.35 million tons, downing 5% in relation to the crop before. As for Brazil, specifically, inventories are forecast at 2.7 million tons, 13.7% down compared to the previous.