The pace of trading in Brazilian cotton market slowed down in September due to the gap between the asking and bidding prices. Cotton prices also decreased and returned to the mid-August level initially, but as the month came to an end, prices increased and the CEPEA/ESALQ Index for cotton closed at 5.6666 BRL/pound on September 30, up 5.8 per cent over previous month.
The monthly average in September, at 5.3184 BRL/pound, closed at the highest level, in nominal terms, in the series of Cepea.
“While farmers were away from the market and/or trying to sell the product at higher prices, purchasers were unwilling to pay more for cotton, claiming difficulties to raise the prices for by-products. In general, agents from processors worked with the product being delivered (previously purchased through contracts), but some purchasers were also interested in closing deals for delivery in the coming months,” the Center for Advanced Studies on Applied Economics (CEPEA) said in its latest fortnightly report on the Brazilian cotton market.
According to Abrapa (Brazilian Cotton Producers Association), cotton harvesting for 2020-21 season has ended in Brazil, and 52 per cent of the product had been processed until September 26. Brazil’s national output is estimated at 2.32 million tons.
According to data from the BBM (Brazilian Commodity Exchange), 351,650 tons of cotton had been sold to the domestic market and 434,660 tons allocated to exports until September 27. The contracts for exports with an option to sell in the Brazilian market have totalled 98,850 tons. Thus, at least 885,160 tons may have been sold, which accounts for 38.2 per cent of the output forecast for Brazil.