Average cotton price rises for the 3rd month in a row and renews record

The price of cotton lint was predominantly on the rise throughout May, renewing the nominal record of the historical series on several occasions, the last being on the 18th, when the CEPEA/ESALQ Indicator, with payment in 8 days, reached R$ 8,1834/lp. Thus, in the month, the Indicator rose 10,2% – May was the third consecutive month of increase.

According to Cepea researchers, the support came mainly from the firm position of sellers, who hold little volume of the 2020/21 harvest for spot trading, especially quality lint.

On the purchasing side, some industries remain outside the market, working with the product in stock and/or on fixed-term contracts. Faced with weakened liquidity throughout the textile chain, companies also reduced production.

Even so, throughout May, some buyers sought to secure raw materials, mainly from the next harvest, for receipt throughout the second half of this year.

The monthly average of the Indicator in May, of R$7,9647/lp, continues to be the highest in the Cepea series, in nominal terms. In real terms (updated by the IGP-DI of April/22), the May/22 average is the highest since April 2011 (R$ 9,0096/lp).