Brazilian cotton index dips 3.75% in May first fortnight

21 May '14

2 min read

Cotton values continue to decrease in the Brazilian market, pressed down by the smaller export and import parities. Besides, most sellers are willing to sell-off stocks from previous crops, which refer to lower-quality product, most of times.

In the first fortnight of May, the CEPEA/ESALQ Index for cotton type 41-4 moved down 3.75% and closed at 1.9381 real (0.8722 dollar) per pound on May 15.

In general, in spite of the higher number of agents operating in the market, the pace of trades continues sluggish. Despite the higher intention to sell, asking prices are far from bidding values. The low quality of some batches also limits liquidity.

From May 6-9, the index for Cotlook A moved up 0.32% in relation to the previous week (April 28-May 2). The dollar average was 0.45% lower than in the week before. The export parity calculated by Cepea FAS (Free Alongside Ship) Paranaguá port averaged 1.7996 real per pound, downing 0.13% compared to the previous.

Conab data released on May 8 indicate that the Brazilian production of cotton might total 1.65 million tons in the 2013/14 crop, for an increase of 26.3% in relation to the previous – a result of the area increase, which changed to 1.09 million hectares.

CEPEA

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