Brazil’s cotton prices have risen to a one-year high, with the CEPEA/ESALQ Index increasing by 1.92% between February 28 and March 14. Despite a record high export in February, overall exports fell significantly. Global production for 2024/25 is anticipated to grow, along with consumption, leaving a slight gap between supply and demand.
In March, cotton prices in Brazil experienced significant upward movement, as indicated by the Centre for Advanced Studies on Applied Economics (CEPEA). The CEPEA/ESALQ Index, which tracks market fluctuations, reached its highest point in one year by mid-March, reflecting a 1.92 percent increase between February 28 and March 14. By the latter date, the index closed at BRL 4.2582 (approximately $0.75) per pound, the highest nominal price since March 14, 2023.
Market participants are concentrating on securing term contracts for international transactions, which have been completed at prices exceeding domestic levels. This trend, as reported by CEPEA, has fostered confidence among sellers, prompting them to adopt steadfast pricing strategies for new trades on the spot market. Simultaneously, demand remains robust, with industry buyers purchasing cotton to restore inventories or meet immediate production requirements.
February saw Brazil export a record 274.63 thousand tons of cotton, according to data from Secex. However, this figure represents a 33.9 percent decline compared to January 2025. For the twelve-month period from March 2024 to February 2025, Brazilian cotton exports surpassed 2.9 million tons.
The International Cotton Advisory Committee (ICAC) has recently released a report predicting that global cotton production for the 2024/25 season may reach 25.688 million tons. This figure marks a 0.55 percent increase compared to the previous estimate and a 6.52 percent rise from 2023/24. Moreover, global cotton consumption is expected to rise to 25.527 million tons, reflecting a year-on-year increase of 2.27 percent and resulting in a minor supply-demand gap of 0.63 percent.
In summary, Brazil’s cotton prices have reached a one-year high due to favorable international market conditions and increased demand. Despite strong exports in February, there was a noticeable decrease compared to the previous month. Looking ahead, global cotton production and consumption are both projected to grow, indicating a dynamic market environment.
Original Source: www.fibre2fashion.com