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Brazil's Cotton Export Surges Amidst Domestic Market Challenges

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Published: Friday, 05 April 2024 12:27

Despite facing sluggish conditions in the domestic market, Brazil's cotton exports are experiencing a notable increase, reports the Centre for Advanced Studies on Applied Economics (CEPEA). The country's exporters are capitalizing on the robust international demand amidst reduced market activity at home.

Data from the Secretariat of Foreign Trade (SECEX) reveals a remarkable surge in cotton exports during the initial 11 days of March, reaching 125.03 thousand tonnes—a staggering 65 per cent jump compared to the same period last year. This surge is reflected in the daily shipment average, which has soared to 11.366 thousand tonnes, far exceeding the figures from March 2023, according to CEPEA's latest report on the Brazilian cotton market.

The export boom contributes to an impressive season tally, with Brazil having shipped 1.754 million tonnes from August 2023 to March 2024, marking a 21.1 per cent increase from the previous season. However, despite this international success, the domestic spot market remains subdued, with buyers and sellers hesitating to finalize new deals, often due to disagreements over price and quality standards.

This stagnation in the domestic market is reflected in the CEPEA/ESALQ cotton index, which witnessed a 6.3 per cent decline in March, settling at BRL 4.0894 (~$0.81) per pound. The disparity between the sluggish domestic market and the thriving export sector underscores the evolving dynamics of Brazil's cotton trade, underscoring the growing reliance on the international market amidst local uncertainties.