Brazil (CONAB) Releases Concerns About Port Congestion In Brazil

According to the report released by CONAB in mid September, the Brazilian cotton output in 2023/24 is expected to be 3.65 million tons, higher than the previous estimate of 3.644 million tons. The latest October report of USDA also raised the Brazilian cotton output to 3.658 million tons (up 0.60% month on month and 15.31% year on year).

In addition, USDA reported that although the export volume of Brazilian cotton in 2024/25 was reduced to 2.678 million tons (1.60% month on month), it was still higher than the export volume of American cotton by 174000 tons. It is obvious that Brazilian cotton will "double kill" American cotton again in terms of output and export volume, which has been agreed by USDA, ICAC, CONAB and other institutions.

According to the feedback of cotton trade enterprises in Qingdao, Zhangjiagang, Wuhan and other places, since the first ten days of October, the shipping date of Brazil Cotton, the main port of China, is from October to December 1-5/32 (strong 28/29GPT) basis is stable at 8.75-10 cents/pound (2022/23 cotton aging M The 1-5/32 basis is concentrated at 7.75-9 cents/pound, and the basis for individual cotton enterprises to sell goods is reduced to 5.5-6.5 cents/pound, compared with 2412 cotton in ICE period), and 31-3/41-3 cotton in the same shipping period The basis difference of 36/37 (strong 28GPT) is 12.5-15.5 cents/pound. Therefore, from the perspective of spot, spot and ship quotations at the port, the price advantage of Brazilian cotton has expanded compared with August and September.

It is worth noting that in the near future, whether international cotton merchants or domestic trade enterprises, the Brazilian cotton list and quotation resources for shipping from October to December have decreased to a certain extent compared with the previous period, and compared with the same period of the previous two years, SM The proportion of quotation of 1-5/32 high grade and high index cotton increased against the trend. According to the industry analysis, the recent severe drought in Brazil has caused the water level of the tributary of the Amazon River to drop to a new low and the export of Brazilian agricultural products to grow rapidly (the export of white sugar, soybeans, corn, cotton and other products has been seriously "hit"). Buyers' concerns about the congestion of Brazilian cotton ports in October and December have risen, which has reduced or even delayed the inquiry and signing of Brazilian new cotton.

Affected by the weather, cotton seeds, harvesting and ginning, the proportion of Brazilian cotton resources of SM grade, 1-5/32 and above lengths will further increase in 2023/24.