Cotton Prices In Brazil Down For Seventh Consecutive Week

MUMBAI (Commoditiescontrol) - Cotton prices decreased in Brazilian markets for the seventh consecutive week through 23rd November. Mills have cotton from previous contracts and they are trading gradually in spot markets, without pressuring demand.

Growers are focused on shipments, but they keep open to new trades. Merchants are also active, purchasing batches to accomplish contracts closed previously. Low quality of cotton available in market and competition between industries and sellers are limiting liquidity. International quotes and dollar decreased in the last seven days, pressuring export parity that remains below domestic prices.

From November 16-23, the CEPEA/ESALQ Index, with payment in 8 days, for cotton type 41-4, delivered in Sao Paulo, decreased 1.35 percent, closing at 2.2697 BRL (0.608 USD) per pound on Monday (23). In the partial of the month (until 23), the Index decreased 2.61 percent. The monthly average, at 2.3043 BRL (0.610 USD) per pound, is 2 percent below the average of Oct/15, but is 27.5 percent higher than in November/14 (values deflated by IGP-DI from October/15).

In November (until 23), CEPEA data show export prices for shipment in December/15 are at the average of 0.6341 USD per pound, 1.66 percent down compared to the average of October/15. For exports in the second semester of 2016 (regarding the 2015/16 crop), the average is at 0.6621 USD per pound, 0.76 percent down compared to the previous month.

From November 13-20, the export parity calculated by CEPEA, FAS (Free Alongside Ship) at Paranagua port, averaged 2.2465 BRL (0.594 USD) per pound, 0.19 percent down compared to the previous week (from Nov. 9 to 13). In the same comparison, Cotlook A Index increased 0.38 percent and dollar decreased 0.55 percent against Real.

According to the Foreign Trade Secretariat (Secex), until late last week (considering 14 working days of November), Brazil exported 76.1 thousand tons of cotton, with daily average at 5.4 thousand tons. If keep this daily pace, until late November, shipments may amount 109 thousand tons, higher than the volume of November 2014.

(By Commoditiescontrol Bureau; +91-22-40015532)