Brazilian cotton quotes rise despite global decrease

The demand from the industry that usually purchases only for immediate consumption and the lower quality of the cotton available continued to push up cotton quotes in the period.

Processing companies that have stocks and contracts to receive were less interested in purchases in early July. Players from these unities say that they may close new purchases in the spot market only when the harvesting steps up and/or when purchasing is needed.

Purchasers, in turn, were firm regarding quotes. These agents were focused on the harvesting, cotton ginning and accomplishment of contracts. Only a few producers were operating, trading mixed batches and asking, in most times, prices above the Index of the day. This is explained by the low quality of the product that will be harvested.

In many regions, rains and pest attack affected crops, which lead sellers to prioritize the accomplishment of contracts until they are sure of the production. Players surveyed from Cepea say that, until the second week of July, the situation is more complicated in the western region of Bahia. Yield and quality are way below the average.

The CEPEA/ESALQ Index for cotton type 41-4 upped 3.85% in the first fortnight of July and closed at 2.1496 real (0.9648 dollar) per pound on July 15.

CEPEA