A report released by Conab (Brazil’s National Company for Food Supply) estimates 0.11 per cent decline in area under cotton cultivation in Brazil in the 2020-21 season compared to that reported in July. Productivity is estimated to rise 0.04 per cent compared to that reported in July, to 1,714 kilograms/hectare. The Brazilian output is currently estimated at 2.341 million tons, stable compared to that previously reported, but 22 per cent lower than that in the previous season.

Domestic cotton consumption is estimated to reach 715,000 tonne while exports in 2021 are now forecast to decline by 1.2 per cent to 2.1 million tonne. Ending stocks in the current season are estimated to decline by 6.9 per cent than that reported in July to 1.29 million tonne and 26.8 per cent below that last season. In July, Brazil’s cotton exports declined 39 per cent to 61,400 tonne from June and 20.6 per cent from July 2020, according to data from Secex, the secretariat of foreign trade.

The CEPEA/ESALQ Index for cotton in Brazil surged by 4.6 per cent during the first fortnight of August spanning from July 30 and August 13. The index closed at its highest price level since May 18, 2021 at 5.1915 BRL/pound on August 13. During the fortnight, Brazilian cotton farmers focused on the harvesting and processing cotton and completing pending contracts. Taking advantage of the price levels, many sellers closed new deals for further delivery – to both the domestic and the international markets – for the cotton from the 2021-22 and the 2022-23 seasons, says Sao Paulo-based Center for Advanced Studies on Applied Economics (CEPEA) in its latest fortnightly report on the Brazilian cotton market.