Brazil's 2023-24 cotton harvest to set new record, prices remain firm

Producers are expected to allocate the initial batches of the season to term contracts, which have been closed at attractive prices. While some market players are keen on finalising new deals, others continue to search for raw materials at lower prices.

Between May 31 and June 28, the CEPEA/ESALQ Cotton Index (payment in 8 days) increased by 1.72 per cent, closing at BRL 3.9697 per pound on June 28. Notably, the Index reached around BRL 4.00 per pound on June 21, a level not seen since mid-April 2024, CEPEA said in its latest fortnightly report on the Brazilian cotton market.

In a report released on June 13, National Supply Company (CONAB) indicated that the cotton area in Brazil for the 2023-24 crop may total 1.945 million hectares, marking a 0.13 per cent increase compared to data released in May 2024 and a 16.9 per cent increase over the 2022-23 season. Although productivity rose by 0.24 per cent compared to the previous month, it is projected to be 1.4 per cent lower than the previous crop, at 1,881 kg/ha. Consequently, Brazil's cotton output is estimated to reach a record 3.66 million tons, a 0.37 per cent increase compared to the previous month and a 15.2 per cent increase over the 2022-23 season.

In Mato Grosso, CONAB projects an 18.9 per cent increase in the cotton area compared to the 2022-23 crop, totalling 1.4 million hectares. Productivity is expected to be 1,877 kg/ha, a 0.8 per cent decrease from the previous season. The production in Mato Grosso is forecast to rise by 18 per cent, reaching 2.66 million tons compared to the 2022-23 crop.

Fibre2Fashion News Desk (KD)