US cotton supply risks carry-over price quotations in Mato Grosso state, BR
Cotton Seed
Market & Price Trends
Innovation & Technology
Caio Alves
Published Aug 11, 2020
The cotton harvest in Mato Grosso state Brazil reached 60% development up to last week, providing farmers a very positive expectation on the 2nd semester, yet to unveil its demand dynamics. During the 1st semester Brazil accumulated an increase of 57% of its cotton bale exports comparing to the same period last year, accounting for 912K metric tons.
In North America supply perspective is still negative as the USDA had diminished cotton yielding for Texas crops, the main producing state in US. That has been the main driver for the uptrend prices in the New York Exhange recently, averaging 64¢ usd/lb. Also the stock balance in Texas is contributing to price appreciation in Brazil, quoted today at 296,25¢ brl/lb. Despite the favourable conditions observed by the brazilian farmers prices are still far from the previous year levels, that benchmarked at 72~74¢ usd/lb. Such depreciation YoY is given by the weaker and shifting consumption habits related to cotton B2C markets, mostly dependent on the online retail activities trend.
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