Brazilian cotton prices fall 1.38% in February

07 Mar '22

2 min read

Pic: shutterstock.com

After registering rise in prices for 7 consecutive months from July 2021 to January 2022, Brazil’s CEPEA/ESALQ Index for cotton dropped by 1.38 per cent in February, closing at BRL 6.8862/pound on February 25. Pressure came from the lower export parity, which was pressed down by international devaluations and the dollar depreciation against the real for most of the month.

Still, the monthly average in February, of BRL 6.9805/pound, set a record, being 2.47 per cent higher than that in January 2022 and 45.75 per cent above that in February 2021. Besides, the monthly average of the cotton Index in February 2022 was 10.5 per cent higher than the export parity, the widest gap since September 2021 (when it closed at 11.3 per cent), the Center for Advanced Studies on Applied Economics (CEPEA) said in its latest fortnightly report on the Brazilian cotton market.

“Along the month, purchasers bought cotton to meet urgent demands and/or replenish stocks. However, they tried to pay less for the product, claiming difficulties to pass on higher costs to by-products. Farmers were focused on the end of next crop’s sowing,” the report said.

According to data from Abrapa, the Brazilan cotton growers’ association, by February 24, 99.8 per cent of the 2021-22 cotton crop had been sown in the country, and there were only some areas to be sown, mostly in Minas Gerais and in Goiás states.

Between January 31 and February 25, the US dollar dropped by 2.98 per cent against the real, to BRL 5.145 on February 25. The Cotlook A Index decreased by 0.48 per cent, to $1.3500/pound on February 28. The export parity FAS (Free Alongside Ship) dropped by 1.9 per cent, to 6.1908 BRL/pound ($1.2033/pound) at the port of Santos (SP) and 6.2013 BRL/pound ($1.2053/pound) at the port of Paranaguá (PR), the CEPEA report said.

Fibre2Fashion News Desk (RKS)

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