Cepea, October 2, 2024 – Cotton values rose in the spot market in September and returned operating above BRL 4.00 per pound, which had not been verified since mid-August. Between August 30 and September 30, the CEPEA/ESALQ cotton Index (payment in 8 days) upped 3.43%, to close at BRL 4.0197 per pound on Sept. 30.
Price rises were related to advances of dollar quotations against Real and of international prices, a scenario that boosts the export parity, which encourages international cotton sales instead of domestic trades.
The supply was still limited in the domestic market in late September, since many agents were focused on accomplishing term contracts. Therefore, sellers were firm regarding values. As for the demand, purchasers in need to close deals ended up accepting prices, especially when they find high-quality batches.
2024/25 CROP – Conab indicates that the 2024/25 cotton area may total 2 million hectares, 3.2% more than in the season before. However, the productivity is likely to decrease 2.1%. Thus, the Brazilian output is estimated at 3.675 million tons, which would be a new record, upping 1.07% against the 2023/24 crop.
COTTON OUTLOOK – The report released on Sept. 27 indicates that the 2024/25 global production may total 25.285 million tons, for an increase of 0.68% compared to data released in August/24 and 0.83% above the volume expected for 2023/24 (25.076 million tons). The world consumption is likely to total 24.295 million tons in 2024/25, downing 0.31% against the month before, but upping 0.75% in relation to the 2023/24 crop. Therefore, the supply would surpass the demand by 4.1%.
As for Brazil, the 2024/25 supply may total 3.836 million tons, and the consumption, 720 thousand tons.
(Cepea-Brazil)
