Cotton market already registers fiber purchase and sale deals with delivery in 2023

The Brazilian Mercantile Exchange is already registering purchases and sales of approximately 10,000 tons of cotton traded by different associated brokers, with delivery for 2023.

One of those brokers is Santiago Cotton, from Belo Horizonte (MG). “The big producers are already protecting themselves and anticipating all the planning. Even with prices not being so great for 2023, deals are carried out with ‘prices to be fixed’. With the advance sale, the producer protects himself and is already planning for the long term and, thus, he can work more calmly”, declared Eduardo Santiago, one of the broker’s partners.

The chart below was compiled using DataLiner data and shows a history of Brazilian cotton exports since 2016:

Brazilian Cotton Export (HS 5201) | Jan to Dec 2016-2020 | TEU

Graph source: DataLiner  (To request a DataLiner demo click here)

Last week, the United States Department of Agriculture (USDA) reduced the estimate for remnant stocks of cotton lint. But here in Brazil, CONAB (the national supply company) estimated production at 2,342 million tons, which represents an increase of 22% compared to the 2019/2020 harvest.

According to experts, the market has already priced these two factors, but new highs can still be seen. “Production is not following consumption and the scenario is high. We believe that there is still room for the product to rise, especially due to the climate situation in the US and political issues between China and Australia, which interfered in trade between the two countries”, he explained.

Source: Comex do Brasil

To read the full original article, access the link below:

https://www.comexdobrasil.com/mercado-do-algodao-ja-registra-negocios-de-compra-e-venda-da-fibra-com-entrega-em-2023/

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