Between March 31 and April 30, cotton prices in the Brazilian market rose by 7.5 per cent, closing at 5.1702 BRL/pound on April 30, the highest nominal level since March 8. Quotes surpassed 5 BRL per pound in late April, a level that was last observed in early March, according to the Center for Advanced Studies on Applied Economics (CEPEA).
The current prices offset the losses registered between the second fortnight of March and the first days of April, when lower demand pressed down quotes, influenced by the uncertainties caused by the new restrictive measures related to the covid-19 pandemic, the CEPEA said in its latest fortnightly report.
The valuations registered in April were majorly linked to sellers’ firm stance regarding asking prices. These agents are aware of cotton valuations abroad, the dry weather in Brazil, which may hamper crops development, mainly the second crop, and sowing in the US. Besides, some sellers were focused on delivering the product previously purchased, making only a few batches available in the spot market, the report said.
As for the demand, the purchasers with urgent needs agreed to pay higher prices for cotton in order to close deals. However, some of these agents were away from the market, working with the product in stock.
According to data from Foreign Trade Secretariat (SECEX), the Brazilian cotton exports were at a fast pace in April, totalling 144,700 tons in the first 15 working days of the month. This volume is 60 per cent higher than that exported in April 2020 (90,600 tons). The daily average of shipments was 9,600 tons, much higher than the 4,500 tons/day in April 2020.