Brazilian Cotton Prices Reach One-Year High Amid Stable Demand

Brazilian cotton prices have surged to a one-year high by mid-March, with the CEPEA/ESALQ Index rising by 1.92%. Market players are focusing on securing international contracts. Although exports fell in February compared to January, total exports over the past year exceeded 2.9 million tons. Global cotton production and consumption are projected to grow in the upcoming season.

In mid-March, Brazilian cotton prices reached a one-year high, according to the Centre for Advanced Studies on Applied Economics (CEPEA). Despite experiencing fluctuations in early March, the overall trend of prices remained upward. Specifically, the CEPEA/ESALQ Index noted a rise of 1.92% between February 28 and March 14, closing at BRL 4.2582 (approximately $0.75) per pound, marking the highest nominal price since March 14, 2023.

Market participants are focusing on securing term contracts, especially aimed at the international market, where transactions are being finalized at higher rates than those in the domestic market. CEPEA’s latest fortnightly report highlights that rising global prices have enhanced sellers’ confidence, prompting them to maintain firm pricing strategies for new spot market trades.

Additionally, demand from industry buyers remains strong as they procure batches of cotton to replenish their inventories or to meet immediate production needs. February saw Brazil export 274.63 thousand tons of cotton, achieved a record high for the month, even though this represented a 33.9% decrease compared to January 2025. Over the past twelve months, from March 2024 to February 2025, Brazilian cotton exports totaled over 2.9 million tons.

The International Cotton Advisory Committee (ICAC) reported that global cotton production for the 2024/25 season may reach 25.688 million tons, reflecting a 0.55% increase from previous estimates and a 6.52% rise compared to the 2023/24 season. Global cotton consumption is anticipated to grow as well, with projections reaching 25.527 million tons, indicating a year-on-year increase of 2.27%, and narrowing the supply-demand gap to only 0.63%.

Brazil’s cotton market is witnessing a significant uptrend, with the CEPEA/ESALQ Index reaching its highest level in a year by mid-March. The focus on securing international contracts is strengthening seller confidence amid rising global prices. Despite a decrease in month-on-month exports, the overall performance remains robust, supported by increasing global production and consumption forecasts. These factors are pivotal for market stakeholders in navigating the current cotton landscape.

Original Source: www.fibre2fashion.com