CEPEA reported that cotton prices kept the upward trend in the Brazilian market in early August. However, price increases in the international market, which increase the export parity, and the allocation of cotton from the new season to the accomplishment of contracts have been raising quotes.
Although export parity is still below domestic prices, producers were limiting batches for trades in the spot market. International prices and the exchange rate have underpinned parity. Cotton growers continued to make cash flow mainly from corn sales, but high prices slowed down the pace of trades for grains in early August.
Purchasers, who have their inventories replenished, were out of the market. Many of these agents expect lower prices and operate in the market to purchase only small amounts.
The CEPEA/ESALQ Index for cotton type 41-4 (delivered in São Paulo city, payment in 8 days) increased 1.95% in the partial of August (July 31 – August 15) and closed at 1.6139 real or 0.7981 dollar per pound on August 15.
According to Conab (National Company for Food Supply), the planted area in the 2011/12 season in Brazil is 1.396 million hectares, 0.3% lower compared to the 2010/11 crop (1.4 million). The production will be 4.7% lower, totaling 1.87 million tons. The average yield may be 1,338 kilos per hectare, 4.4% below that obtained in the previous season.
As for shipments, data from Foreign Trade Secretariat indicate that Brazil exported 39.8 thousand tons of cotton in July, 5.9% more than in June and 44.2% higher in relation to July 2011. In the partial of 2012, the volume exported is 362.8 thousand tons, against 77.8 thousand in the same period of 2011. |
GREIGE FABRIC
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