Global market price of cotton softens due to huge increase in exports from Brazil

17-Jul-2024 04:55 PM

Sao Paulo. The pressure on the global market price of cotton is continuously increasing because on one hand the competition on the export front is increasing among the major producing and exporting countries, while on the other hand price conscious and sensitive buyers are giving preference to the use of clothes made from other cheap fabrics.

During the current month, the cotton futures price at New York-based ICE fell to below 69 cents per pound, which was the lowest level since October 2020. In May 2022, the cotton futures price there jumped to the top level of the last 10 years, while the current price level is less than half of that. 

According to trade analysts, the pressure on the price of cotton has increased due to a strong increase in exports from the Latin American country - Brazil.

Brazil has now become the world's leading exporter of cotton, leaving behind the US. During the 2023-24 marketing season, 118 lakh bales of cotton were exported from the US, while its shipment from Brazil increased rapidly to 124 lakh bales.

After this, Australia stood third with exports of 58 lakh bales. India lagged far behind in terms of cotton exports. 

Brazil is constantly trying to increase the production of cotton, while its domestic demand and consumption is low there,

so it gets the opportunity to export most of its production abroad. An American organization says that the rapid increase in the production and export of cotton by Brazil can pose a serious threat to the US in future because Brazil is targeting those countries in cotton exports which are traditional buyers of American cotton. The cotton production area in Brazil increased to 18.70 lakh hectares, which was 13 percent more than the area of ​​2022-23.