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Cotton prices move up in Brazilian market last month
Mar '18
Cotton prices move up in Brazilian market last month
Oscillations in international prices and the dollar-real exchange rate resulted in an increase in price in Brazil’s domestic market in February 2018. After slow pace of cotton trade in the first fortnight due to the carnival period and the end of new crop sowing activities, processors and traders became more active in the second fortnight.
Between January 31 and February 28, the CEPEA/ESALQ (Center for Advanced Studies on Applied Economics/Luiz de Queiroz College of Agriculture) cotton Index rose 3.2 per cent, closing at 2.8417 BRL per pound on February 28, CEPEA said in its latest fortnightly report on the Brazilian cotton market.
The second fortnight of the month saw an increase in liquidity in the domestic market and processors aimed to replenish inventories. Buyers prioritised high quality batches but many of them were asking at values lower than offer prices. While sellers were not flexible regarding prices, they agreed to extend payment deadlines. Thus, traders made batches available in the spot market, meeting part of processors’ demand.
In terms of contracts for future delivery, the month saw closing of several contracts, to be shipped this semester (cotton from the 2016-17 season), as well as involving cotton from the 2017-18 and the 2018-19 crops. trades involved both fixed prices and/or values to be fixed based on the Index or on contracts at ICE Futures.
As of February 20, 69.8 per cent of the 2016-17 cotton crop had been sold, according to the data from BBM (Brazilian Commodity Exchange). Of this total, 59.6 per cent were allocated to the domestic market and 40.4 per cent to the international market.
According to a separate data from the secretariat of foreign trade (SECEX), between August 2017 and February 2018, Brazil exported 780,000 tons of cotton. In 2017-18 season, 701,000 tons of cotton have been sold, of which 62.8 per cent were meant for exports while the remaining 37.2 per cent was for the domestic market. (RKS)

Fibre2Fashion News Desk – India

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June 2018

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