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Global markets thwart Brazilian cotton price rise

05 Sep '13
1 min read

In late August, cotton quotes resumed moving down in the Brazilian market, affected by price drops in the international scenario. Not even the significant dollar valuation prevented price decreases in Brazil.

In the Brazilian market, the export parity dropped, indicating significant advantage to domestic sales. Purchasers, focused on international price drops, are refrained to trade, expecting more price decreases.

Cotton dealers are flexible in regard of quotes, in an attempt to obtain gains with recent price rises. Cotton growers, in turn, try to keep asking prices or are refrained from new trades.

In the accumulated of August, the CEPEA/ESALQ Index for cotton type 41-4 upped 3.4% and closed at 2.1598 real (0.9063 dollar) per pound on Aug. 30.

The USDA released in late August that the world cotton supply may total 25.3 million tons in the 2013/14 season, 3.9% smaller compared to the previous. The world consumption may increase 2.3% in relation to the year before, to 23.9 million tons.

Considering supply reduction and consumption increase compared to July data, stocks are forecasted smaller, at 20.4 million tons. The stock/consumption ratio may remain at the record of 85.4%.

CEPEA

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