Purchasers put pressure, but sellers' firm stance underpins prices in BR

Cepea, May 18, 2021 – The cotton purchasers and sellers consulted by Cepea have increased competition for the product this month. While agents from processors bid lower prices for cotton batches, many sellers are unwilling to lower quotes. In the last days, however, sellers were slightly more flexible about prices, following the downward trend of prices abroad and the dollar depreciation against Real.


Between May 3 and 10, the CEPEA/ESALQ Index for cotton dropped by 0.68%, to 5.1864 BRL/pound on Monday, 10. Thus, this month (until May 10), this Index has increased by a slight 0.31%, and, on the average of the month, it is 20.7% higher than the export parity. The dollar closed at 5.231 BRL, the lowest level since January 14.


In general, liquidity is low. Agents from processors are only buying small volumes, aiming to replenish inventories and/or meet urgent demands.


2020/21 SEASON – Agents from processors are trying to buy cotton for delivery in the second semester of 2021. On the other hand, cotton farmers have reported high sales of the 2020/21 crop and are now focused on the current low soil moisture in some regions and the possible effects of this scenario on crops productivity. In São Paulo, Paraná and some areas in Bahia, the harvesting has begun, but the volume harvested is still low.





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