Cotton prices rise in Brazilian market in Nov '17

Despite low number of batches traded, cotton prices increased in Brazilian domestic market in November 2017, Center for Advanced Studies on Applied Economics (CEPEA) said in its latest report on cotton market. Between October 31 and November 30, the CEPEA/ESALQ Index increased 1.6 per cent, closing at 2.4475 BRL ($0.7507) per pound on November 30.

Although cotton trades involved only small batches in late November, that was enough to warm up the domestic market. Representatives of processors and traders were seen trying to close new trades to replenish inventories and accomplish contracts. Several of them were already planning for the low availability of trucks during the upcoming holiday season.

Buyers, however, continued to press down quotes, and were flexible only regarding high quality batches. Sellers, on the other hand, were firm regarding asking prices, irrespective of the batch quality. As a result, several trades for short-term delivery were closed, but others were hampered due to the gap between price and quality.

Meanwhile, trading companies increased asking prices in the domestic and spot markets and for delivery in the next year, as dollar rose 1.14 per cent against real in November. Several export contracts were closed late in the month, mostly involving cotton from 2017-18 crop.

According to the Brazilian Institute of Geography and Statistics (IBGE), the industrial production of spinning mills in September 2017 dropped 1.23 per cent compared to the previous month, but increased 2.82 per cent compared to September 2016. For the clothes and accessories sector, production increased 0.85 per cent from August to September, and production increased 4.29 per cent compared to September last year. (RKS)

Fibre2Fashion News Desk – India