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Export parity underpinning Brazilian cotton prices: CEPEA
08 Jun '15
2 min read
After successive drops between the period May 5-26, 2015, export parity is underpinning Brazilian cotton prices mainly because of high exchange rate.
“In the last week, Brazilian cotton quotes were just 5 per cent above export parity, which had not occurred since mid-March,” CEPEA Brazil said in a report.
“Besides that, the domestic index returned to levels below the first contract at ICE Futures, which indicates that quotes might be stable in Brazil next days,” it added.
In May, the export parity calculated by CEPEA at Free Alongside Ship (FAS) terms at Paranaguá port, had an average of 1.9067 BRL per pound, an increase of 2.2 per cent compared to April 2015.
In nominal terms, in May, Cotlook A Index increased 1.6 per cent, while dollar was up 0.7 per cent as against the Real, when compared to the previous month.
The CEPEA/ESALQ Index (cash payment in dollar) retreated 4.1 per cent, when compared against the same period, averaging at 0.6779 dollar per pound.
“Even with lower prices, processors felt the impact of cotton prices increases in March and April,” the report observed.
“Besides, electricity was more expensive and enterprises were facing difficulties to adjust prices of manufactured products,” it informed.
The Foreign Trade Secretariat reported that until the end of third week of May, 1,100 tons were shipped daily, which was 60.2 per cent lower than the average of April 2015.
In revenue, the daily average stood at $1.6 million, 61.74 per cent down compared to the previous month when it amounted to $4.1 million.
According to the Secretariat, the average price in dollar in May dropped 3.9 per cent as against that in April 2015 at $1,438.8 per ton. (AR)
“In the last week, Brazilian cotton quotes were just 5 per cent above export parity, which had not occurred since mid-March,” CEPEA Brazil said in a report.
“Besides that, the domestic index returned to levels below the first contract at ICE Futures, which indicates that quotes might be stable in Brazil next days,” it added.
In May, the export parity calculated by CEPEA at Free Alongside Ship (FAS) terms at Paranaguá port, had an average of 1.9067 BRL per pound, an increase of 2.2 per cent compared to April 2015.
In nominal terms, in May, Cotlook A Index increased 1.6 per cent, while dollar was up 0.7 per cent as against the Real, when compared to the previous month.
The CEPEA/ESALQ Index (cash payment in dollar) retreated 4.1 per cent, when compared against the same period, averaging at 0.6779 dollar per pound.
“Even with lower prices, processors felt the impact of cotton prices increases in March and April,” the report observed.
“Besides, electricity was more expensive and enterprises were facing difficulties to adjust prices of manufactured products,” it informed.
The Foreign Trade Secretariat reported that until the end of third week of May, 1,100 tons were shipped daily, which was 60.2 per cent lower than the average of April 2015.
In revenue, the daily average stood at $1.6 million, 61.74 per cent down compared to the previous month when it amounted to $4.1 million.
According to the Secretariat, the average price in dollar in May dropped 3.9 per cent as against that in April 2015 at $1,438.8 per ton. (AR)
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