Although Brazilian cotton has shown a decline in futures prices this week, the fiber continues to stand out in the international market. According to data from Benjing Cotton Outlook Consulting (BCO), in December 2022, 66.8% of the cotton imported by China came from Brazil.
The information is from the Abrapa Market Intelligence Bulletin, released this Friday (03).
Check out the highlights brought by the Abrapa Market Intelligence Bulletin:
Cotton in NY 1 – The Mar/23 contract closed yesterday at 86.39 U$c/lp (-1.27%).
Cotton in NY 2 – Reference for the 2022/23 harvest, the Dec/23 contract was quoted at 86.00 U$c/lp (+0.09%) and the Dec/24 at 82.92 U$c/lp (+0.70%) for the 2023/24 harvest.
Prices – Yesterday (02/02), Brazilian cotton was quoted at 100.50 US$c/lp (-100 pts) for shipment in Feb/Mar-23 (Middling 1-1/8″ (31-3-36) Asia post, source Cotlook). For shipment in Oct-Nov/23, the price reference also closed at 103.00 US$c/lp (-75 pts).
Bullish 1 – The IMF is less pessimistic and, for the first time in a year, revised its global economic growth forecast upwards: 2.9% in 2023.
Bullish 2 – The agency projected that Chinese GDP will increase 5.2% in 2023 with the reopening of the economy after the strict Covid-Zero policy – well above the 4.3% of last year. Of the developed economies, the worst performing is the United Kingdom: a 0.6% decline. Bulls 3 – The US Fed only raised interest rates by 0.25%, reaching 4.75%, in line with expectations. But the market was encouraged by the press release from its President.
Bears 1 – Oil prices fell significantly this week after the announcement of high inventories in the US.
Bears 2 – Although demand has improved compared to the last months of 2022, it is still timid and concentrated on shorter shipping times.
Market 1 – The ICAC released its February figures with virtually no changes compared to the previous month, with global consumption projected at 23 million tons and production at 24.7 million tons.
Market 2 – The stock/use ratio in 22/23 is projected to be 93.9% at the end of the cycle, much higher than the 77.7% in 21/22.
Market 3 – The lack of dollars continues to impact business in Pakistan and Bangladesh.
China 1 – In December 2022, 66.8% of the cotton imported by China came from Brazil. Of the total 170.9 thousand tons of cotton, 114.2 thousand tons were Brazilian. The data is from Benjing Cotton Outlook Consulting (BCO).
China 2 – In the year to date, however, North American cotton was ahead of Brazilian cotton.
Bangladesh 1 – Predicting that the Bangladeshi textile industry will double in size in the coming years, the president of the Federation of Bangladesh Chambers of Commerce & Industries (FBCCI), Jashim Uddin, said that the country will increase its purchases from Brazil.
Bangladesh 2 – The statement was made this Wednesday (1st), during the signing of a Memorandum of Understanding between Apex-Brasil and FBCCI. The Bangladeshi institution represents 80% of Bangladesh’s private industries. Partnership 1 – The president of Abrapa, Alexandre Schenkel, and the president of Apex-Brasil, Jorge Viana, met for the first time since taking office in January.
Partnership 2 – Viana recognized the strategic importance of the Cotton Brazil program and guaranteed its continuity. “We want to promote the expansion of cotton farming and its exports,” he said.
Partnership 3 – Apex is an important partner of Abrapa and Anea in the Cotton Brazil program, launched in December 2019 with the mission of strengthening the image and disseminating the national fiber in the main global markets.
Sustainable 1 – Only 5% of the area planted with cotton in Brazil was irrigated in 2022. The data is from the ICAC Databook 2022, published in January.
Sustainable 2 – The ICAC yearbook also shows that Brazil is the country with the highest percentage of crops cultivated in direct planting: 75%.
Brazil – Exports 1 – Cotton and corn are the agribusiness sectors that have expanded their sales abroad the most in the last 20 years. According to a study by Insper, both products have seen annualized growth of 15% in exports over the last 20 years.
Brazil – Exports 2 – Brazil exported 124 thousand tons of cotton in Jan/23. The volume was 37.8% lower than the total shipped in Jan/22.
Brazil – Exports 3 – Despite the drop in the last two months, in the accumulated period from Aug/22 to Jan/23 (1st half of the commercial calendar) exports totaled 1.08 million tons – an increase of 4.4% compared to the same period last season.
Brazil – Sowing 2022/23 – As of yesterday (02/02): BA (97%); GO (87%); MA (82%), MG (90%), MS (100%); MT (67%); PI (100%); PR (100%), SP (94%). Total Brazil: 75% sown.
Brazil – Processing 2021/22 – Brazil: 99.6% processed (only MA has not finished yet)
Source: Canal Rural