Cautious purchasers and beginning of arrival of cotton from the new season led to decrease in cotton prices in the Brazilian market in June. Between May 30 and June 29, the Center for Advanced Studies on Applied Economics (CEPEA)/ Luiz de Queiroz College of Agriculture (ESALQ) cotton index decreased 3.9 per cent, closing at 3.6032 BRL per pound on June 29.
“Some processors have been working with stocked cotton and/or below capacity and, thus, made purchases in small volumes in the spot market to replenish their inventories,” CEPEA said in its latest fortnightly report on Brazilian cotton market.
During the fortnight, trading companies were not very active, even for future delivery. One of the reasons for that is the uncertainty regarding freight prices in the future.
On the supply front, it was still low in the spot market, since the 2017-18 harvesting was slow in late June. In general, agents expect cotton availability to increase in July, based on harvesting advances in Mato Grosso, the biggest cotton-producing state in Brazil.
Cold weather in early June delayed the development of part of the crop. According to a report from Mato Grosso Association of Cotton Producers (Ampa), until June 23, harvesting was completed only on 0.88 per cent of the area sown (782,900 hectares) in the state. (RKS)
Fibre2Fashion News Desk – India