Global cotton supply outpaces demand; prices fall in Nov

In Brazil, sellers primarily focused on term contracts, the processing of the 2022-23 cotton crop, and preparations for the upcoming season's planting. Notably, exporters were more active in November, with the volume shipped from August to November 2023, representing half of the total volume exported during the 2021-22 season (from August 2022 to July 2023).

Meanwhile, demand from the textile industry remained subdued, primarily engaging in short-term trades, and only slightly increasing purchases towards the end of the month to prepare for the year-end period, CEPEA said in its latest fortnightly report on the Brazilian cotton market.

Between October 31 and November 30, the CEPEA/ESALQ Index for cotton saw a decrease of 3.88 per cent, closing at BRL 3.8628 per pound on November 30.

According to data from the Secretariat of Foreign Trade (SECEX), Brazilian cotton shipments reached 253.71 thousand tons in November, marking a 12 per cent increase compared to October 2023 but a 5.5 per cent decrease compared to November 2022 (268.59 thousand tons). From August to November 2023, Brazil exported 770.22 thousand tons, surpassing half of the volume shipped between August 2022 and July 2023 (1.449 million tons).

The average export price for cotton in November 2023 was $0.9407 per pound, reflecting a 7.4 per cent monthly increase ($0.8755 per pound) and a 5.9 per cent annual rise ($0.8884 per pound). This represents the highest monthly average since October 2022 when it reached $0.9506 per pound.

According to Brazilian Association of Cotton Growers (Abrapa), processing activities had reached 90 per cent of production by November 30. In Mato Grosso, activities had reached 88 per cent of the total, while in Bahia, it was as high as 97 per cent.

According to data released by International Cotton Advisory Committee (ICAC) on December 1, global cotton production for 2023-24 is estimated at 24.914 million tons, marking a 0.9 per cent decrease from the November 2023 report, yet still slightly higher compared to the previous crop (+0.28 per cent).

Worldwide cotton consumption increased by 2.54 per cent in the month and is expected to rise by 1.13 per cent compared to 2022-23, reaching 23.945 million tons. Consequently, consumption is projected to be 3.89 per cent below the available supply.

ALCHEMPro News Desk (KD)