New crop cause of sellers, buyers dispute in Brazil

18 May '17

2 min read

With the development of cotton crops in the 2016/17 season coming to an end, Brazil’s Centre for Advanced Studies on Applied Economics has noted that nearness of the new crop increases dispute between purchasers and sellers. The harvesting period is approaching in many regions of the country. Liquidity, however, was low in the first fortnight of May.

While sellers were willing to trade the remaining batches from the 2015/16 season at firmer prices, purchasers were retracted, working with the product previously purchased, the centre said.

The development of crops has been satisfactory in almost all Brazilian regions and a good or excellent crop is expected. Thus, purchasers believe the entry of the new crop in the second semester may push down quotes. Sellers aim at selling a higher percentage of the output through contracts.

Between April 28 and May 15, the CEPEA/ESALQ Index, 8-day payment terms, for cotton type 41-4, delivered in São Paulo, increased a slight 0.14 per, closing at 2.7679 BRL (US $ 0.8906) per pound on May 15.

In April, 30.9 thousand tonnes of cotton were exported (Secex data), 4 per cent lower than in March/17 and 24.4 per cent down compared to the volume shipped in April/16.

From August/16 to April/17, exported shipments totaled 554.5 thousand tonnes, 36.3 per cent lower than that in the same period last season (between August/15 and April/16).

As for importations, Brazil purchased 4.8 thousand tonnes of cotton in April, 43.1 per cent lower than in March/17. However, from August/16 to April/17, the volume reached 29.5 thousand tonnes, much larger than 3.8 thousand tonnes from August/15 to April/16. (SV)

Fibre2Fashion News Desk – India

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