Cepea, April 16, 2025 – Trade tensions, specially between the United States and China, resulted in uncertainties and oscillations of future prices in early April, which slowed down the pace of trades in the spot market. In Brazil, the gap of prices and/or quality of the product continued to limit negotiations in the offseason.
Many producers had already sold the inventories from the 2023/24 season, and sellers who still have batches were firm about quotations. Thus, purchasers who have immediate demands and/or need high-quality product have to pay higher values to close deals. This scenario, along with the increase of the export parity, influenced domestic prices, which hit the highest level since early March/24.
Comparing March 31 and April 15, the CEPEA/ESALQ Index (payment in 8 days) increased 1.97%, closing at BRL 4.2999/pound on April 15, the highest since March 4, 2024 (BRL 4.3326/pound), in nominal terms.
2024/25 CROP IN BRAZIL – Conab released a report on April 10 indicating that the cotton output is likely to increase 1.8% compared to the report released in March/25 and 5.1% in relation to the 2023/24 season, reaching 3.89 million tons, a record. The area is expected at 2.079 million hectares, 1.76% up in the monthly comparison and 6.9% more than in the last crop. The productivity is estimated at 1,871 kilos per hectare, for an increase of 1.7% against the previous season.
GLOBAL SUPPLY AND DEMAND – The USDA released a report on April 10 indicating that the world cotton production may total 26.32 million tons in the 2024/25 season, downing 0.1% against the previous report (March/25), but upping 7% compared to the 2023/24 crop.
The global consumption, in turn, is likely to amount 25.261 million tons, 1.1% more than in the same period last year. As a result, the supply is projected to be 4.2% above the demand in the 2024/25 crop.
(Cepea-Brazil)
Centro de Estudos Avançados em Economia Aplicada – CEPEA-Esalq/USP
