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Brazilian cotton prices drop 0.35% in February

The Center for Advanced Studies on Applied Economics (CEPEA)/ESALQ cotton Index, with payment in 8 days, dropped 0.35 per cent between January 31 and February 28 to close at 2.9318 BRL per pound at the end of the month. The average price in February was 2.9341 BRL per pound, 0.96 per cent lower compared to the previous month, in real terms.

Prices oscillated and liquidity decreased in the market during the month due to the fierce competition between the Brazilian agents, CEPEA said in its latest fortnightly report on the domestic cotton market.


“Part of the active purchasers was searching for high quality batches, but bidding prices were lower than asking prices. Other purchasers, however, accepted lower quality cotton. Some processors, in turn, stayed out of the market during the entire month,” the CEPEA report said.


According to data from the BBM (Brazilian Commodity Exchange) tabulated by CEPEA, 67.5 per cent of the 2017-18 Brazilian crop, estimated at 2.005 million tons, may have been traded until February 28. Of that total, 57.7 per cent was bought for use in the domestic market, 30.9 per cent for export to the international market, and 11.3 per cent to flex contracts (exports with an option to sell in the Brazilian market).


For the coming season, at least 22.3 per cent of the 2018-19 production (forecast at 2.564 million tons by Conab – National Company for Food Supply) may have been traded in the same period, with 47.5 per cent allocated to the domestic market, 26.4 per cent to exports, and 26.1 per cent to flex contracts.

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