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Cepea, December 6, 2023 – Cotton prices dropped in both domestic and international markets in November, influenced by expectations of world supply higher than the demand in the current season.
In Brazil, sellers were focused on term contracts, on processing the 2022/23 crop and on the planting of the new season. Moreover, players preferred to export in November – from August to November/23 (the partial of the 2022/23 crop), the volume shipped already represents half of the total volume exported in 2021/22 (from August/22 to July/23).
As for the demand, the industry showed interest only in short-term trades, increasing purchases slightly at the end of the month, in order to plan for the end-of-the-year period.
Between October 31 and November 30, the CEPEA/ESALQ Index for cotton dropped 3.88%, closing at BRL 3.8628/pound on Nov. 30.
According to data from Secex, Brazilian cotton shipments totaled 253.71 thousand tons in November, 12% up than the volume registered in October/23, but for a decrease of 5.5% in relation to Nov/22 (268.59 thousand tons). From August to November/23, Brazil exported 770.22 thousand tons, more than half of the volume shipped between August/22 and July/23 (1.449 million tons).
The price average of the product exported was USD 0.9407 per pound in Nov/23, moving up 7.4% in the monthly comparison (USD 0.8755/pound) and 5.9% in the annual comparison (USD 0.8884/pound), and it is the highest monthly average since October/22, when it hit USD 0.9506/pound.
Abrapa indicates that processing activities reached 90% of the production up to November 30. In Mato Grosso, activities hit 88% of the total, and in Bahia, 97%.
According to data from Icac released on Dec. 1st, the 2023/24 global production is estimated at 24.914 million tons, 0.9% less than the report released in November/23, but still slightly higher compared to the crop before (+0.28%).
As for the world consumption, it increased 2.54% in the month and may move up 1.13% compared to 2022/23, at 23.945 million tons. Therefore, the consumption may be 3.89% below the supply.
(Cepea-Brazil)
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Fonte: Cepea