According to the Brazilian CEPEA report, the average value of the Brazilian cotton index in February was 6.9805 reais/pound, hitting a record high and 2.47% higher than on January 22 (the index has risen for 8 consecutive months). Data from Brazil’s ABRAPA shows that as of the end of February, Brazil’s cotton sowing rate for the 2021/22 season has reached 99.8%, and only some areas in Minas Gerais and Goiás still need to be sown.
As cotton planting in Brazil comes to an end, area statistics are gradually coming to light, and substantial growth is almost certain. The industry estimates that Brazil’s cotton planting area in 2021/22 will be 1.53 million hectares (3.7 million acres), or an increase of 12.1% from last year. The 2021/22 annual market report released by CONAB (National Commodity Supply Company) shows that Brazilian cotton production in 2021/22 may increase by 15% year-on-year (year-on-year increase in unit yield), and export capabilities continue to improve.
Cotton trading companies in Qingdao, Zhangjiagang and other places have reported that port bonded + non-bonded Brazilian cotton stocks have shown a slight downward trend since mid-to-late February. Although domestic cotton textile companies and traders are not optimistic about the shipping schedule of Brazilian cotton from September to December 2022 (2021/ 2022 new cotton) has attracted significantly more attention than bonded cotton and immediate shipment, but there is still hesitation in signing contracts and placing actual orders, and the transaction volume needs to be increased.
On the one hand, although expectations for a substantial increase in Brazilian cotton planting area and output in 2021/22 are relatively strong, buyers are still concerned about the delivery capacity of Brazilian ginners in 2021/22 under the Russia-Ukraine conflict, rising sea freight and the resurgence of the new crown epidemic. , land transportation and port shipping concerns are difficult to subside; on the other hand, the quotation advantage of Brazilian cotton for the September-December shipping period is not obvious, and it is not attractive enough to buyers. For example, the current basis difference of Brazilian cotton M 1-1/8 (strong 28GPT) in major ports in China for October/December shipments is stable at 18-19 cents/pound, and exporters and traders are highly willing to raise prices; furthermore, due to In the first quarter of 2022, the prosperity of cotton textile and clothing companies in receiving orders is lower than expected; the sales progress of Xinjiang cotton in 2021/22 is lagging significantly year-on-year, and the year-on-year growth of domestic cotton planting area in 2022 and other negative pressures. Textile companies believe that the cotton market this year is not only Structural contradictions will not appear, and the overall supply exceeds demand, and the plan to purchase Brazilian cotton for far-month shipments has been postponed.
</p
