MUMBAI (Commoditiescontrol) - In the Brazilian market, low availability of cotton and demand for batches of high quality are pushing prices up. Processors are more active, buying small batches - from 200 tons below - and traders are also demanding cotton.
Despite various types of cotton on spot markets from the 2014-15 season and the previous one, which pressured quotes in some moments, the urgency is leading processors to increase prices paid.
Harvesting of 2014-15 crop is continuously slow in major producing regions and most batches of high quality cotton are allocated to accomplish contracts. Some agents say the amount of good quality cotton is not enough to meet commitments in July. According to CEPEA collaborators, many batches have problems with quality.
Between July 20 and 27, the CEPEA/ESALQ Index, with payment in 8 days, for cotton type 41-4 (including freight to Sao Paulo city) increased 0.77 percent, closing at 2.1288 BRL per pound (0.652 dollar/pound) on July 27. In the accumulated of July (until 27th), the Index is 1.15 percent higher than the average of June 2015 and 8.62 percent higher than the average of July 2014, at 2.1131 BRL per pound (0.661 dollar/pound) - values deflated by IGP-DI from June 2015.
Between July 20 and 24, import parity released by CONAB (National Company for Food Supply), based on Cotlook A Index, CIF Sao Paulo, averaged 2.6039 BRL (0.803 dollar) per pound, 1.75 percent up compared to the previous week (at 2.5592 BRL or 0.812 dollar per pound). In this case, CONAB consider dollar at 3.2426 BRL.
In the same period, export parity calculated by CEPEA, FAS (Free Alongside Ship) at Paranagua port, at 1.9950 BRL (0.614 dollar) per pound, increased 1.87 percent compared to the previous week (from July 13 to 17). In the same period, Cotlook A Index decreased 1.23 percent and dollar increased 3.08 percent regarding Real.
In July (until 27th), CEPEA calculations show that export prices to shipment between July and December 2015 averaged 0.6919 dollar per pound, 0.62 percent up compared to the average of June 2015. Shipments in the second semester averaged 0.7109 dollar per pound, 1.42 percent up compared to the previous month.
According to Secex (Foreign Trade Secretariat) data, until July 24, the average of shipments was 700 tons, 14 percent down compared to June 2015. The average revenue is 1.1 million dollars, 14 percent lower than last month. The average price of July 2015 remained stable compared to June 2015, at 1,449.0 dollars per ton or 4,626.23 BRL per ton, 2.68 percent up compared to the average price of June 2015.
(By Commoditiescontrol Bureau; +91-22-40015534)
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