2016 Brazilian cotton prices to stay firm: CEPEA

19 Jan '16

2 min read

The latest report of CEPEA informs that the current scenario points to firm cotton prices in Brazil in 2016.

“However, for the first quarter, quotes may be underpinned by a valued dollar that favours Brazilian exports and the good volume from the 2014/15 crop already traded,” it observed.

Besides, supply of cotton above type 41-4 may be lower early this year, while in the second quarter, the CEPEA forecast shows a decrease in the Brazilian and global supply from the 2015/16 crop, which can balance the supply and demand relation.

According to CEPEA, in large producing states, the planted area may decrease, especially in Bahia, due to increases in production costs from the 2015/16 crop and difficulties to obtain credit.

Cotton brokers, in turn, who traded cotton from the 2014/15 and 2015/16 crops previously, expect higher prices in 2016.

Quoting CONAB, the report says that the expectation of exports for the 2014/15 crop is 790,000 tons, but in 2016, the volume may be 6.33 per cent lower due to the decrease in Chinese consumption.

For the 2015/16 crop, CONAB has forecast total supply which includes initial stocks, production and imports at 1.9 million tons and total demand which includes domestic consumption and exports at 1.54 million tons.

“Thus, availability for the period will be enough to supply the domestic industries and accomplish export contracts for around three months,” the report noted. (AR)

Fibre2Fashion News Desk – India

More Textiles News - Brazil...