Cotton production in Brazil reached record levels in the 2022/23 season, driven by increases in both acreage and productivity. Global supply also increased. However, demand did not increase as availability increased, as adverse economic conditions drove players away from the business, limiting sales of manufactured goods. More supply than demand led to stockpiles, leading to a decline in domestic and international cotton prices.
In Brazil, prices fell significantly from January to May, despite the offseason period, due to expectations of a good harvest and weak demand. Due to the higher surplus, exports should record a good performance in 2022/23, but trades were moving at a slower pace than anticipated in early 2023, as prices were not considered attractive by sellers.
Between May and June, the monthly average was stable, but in July prices were at their lowest level of the year. In the following months, exports led to less fluctuations in the monthly average, which helped reduce the domestic surplus. 2023 also saw logistics issues and high transportation costs, as well as inconsistencies in product quality, limiting trade.
In 2023, the CEPEA/ESALQ index for cotton fell 24.4%, closing at BRL 4.0230/pound on December 26. Between December 29, 2022 and December 26, 2023, export parity went down by 19.4%, impacted by a decrease of 11.5%. 8.6% devaluation of dollar quotes against the Coinlook A index and the real.
2022/23 crop in Brazil - According to Conab, the 2022/23 area increased by 4% compared to the previous one, totaling 1.664 million hectares. Productivity was estimated at 1,907 kg per hectare, 19.5% higher than the previous season and a record. Cotton production in 2022/23 was projected to be 3.173 million tonnes, an increase of 24.2% over the previous year and the highest in history.
USDA – Global production for 2022/23 increased by 1.8% compared to 2021/22, totaling 25.395 million tonnes and sustained by higher supplies in China, India and Brazil. The United States and Pakistan recorded significant declines during the same period.
Regards
Team Sis
Any query plz call 9111977771
https://wa.me/919111977775
