MUMBAI (Commoditiescontrol) - Cotton prices in Brazil continue to gain support from delayed harvesting, lower production and inactive selling. Further, gaining U.S. dollar, which increases export and import parity, prompting farmers to focus on contracts accomplishments, especially to international markets.
The dollar increased 4.16 percent against Real until 24th August, 2015, Cotlook A Index raised 4.51 percent and the CEPEA/ESALQ Index, 4.54 percent.
According to BBM data (Brazilian Commodity Exchange) calculated by Cepea, 43.5 percent of the 2014-15 crop, forecast at 1.504 million tons, had already been traded until August 24. From this total, 68.6 percent was destined to international markets and 31.4 percent, to domestic. This scenario is opposite to observed in the last eight seasons, when more than 50 percent of Brazilian production was destined to the domestic market. Regarding the 2013-14 crop, 1.73 million tons were harvested, with 44.6 percent destined to exports and 55.4 percent, to the domestic market.
Regarding exports, the Brazilian Company for Food Supply (Conab) forecasts 790 thousand tons may be shipped this season. Based on this expectation, Brazil still needs to trade around 300 thousand tons in the international market. Besides, national cotton industries still need to purchase 500 thousand tons to balance total consumption projected by Conab, at 800 thousand tons this crop. The volume not registered at BBM yet, at 855 thousand tons, points to a scenario with balanced supply and demand. Thus, prices in Brazil will depend on export parity at least until next season.
According to the Foreign Trade Secretariat (Secex), until August 21 Brazilian exports surpassed expressively shipments occurred in July/15, but remained below shipments of August/14. Considering the first 15 business days in August, the daily average of Brazilian shipments totaled 2.2 thousand tons, 226 percent up compared to the average of July/15. In revenue, the daily average was 3.6 million dollars, 255 percent up compared to the previous month. The average price of August/15 in dollar, according to Secex, increased 8.9 percent, reaching 1,585.3 USD per ton. In Real, the average was 5,528.56 BRL/ton, 17.78 percent up compared to July/15.
Between August 17 and 24, the CEPEA/ESALQ Index, with payment in 8 days, for cotton type 41-4 (including freight to Sao Paulo city) increased 1.48 percent, closing at 2.2338 BRL (0.640 USD) per pound on August 24. In the partial of the month, the Index averaged 2.1864 BRL (0.627 USD), 3.29 percent up compared to July/15 and 20.75 percent higher than in August/14 - values deflated by IGP-DI (Brazil’s general price index) from July/15.
Harvesting in Mato Grosso State increased, favored by dry weather, according to the Mato Grosso Association of Cotton Producers (AMPA).
Between August 17 and 21, export parity calculated by Cepea, FAS (Free Alongside Ship) at Paranaguá port, at 2.1940 BRL (0.631 dollar) per pound, increased 4.08 percent compared to the previous week (from August 10 and 14). In the same period, Cotlook A Index increased 4.18 percent and dollar, 0.22 percent regarding Real.
Regarding the import parity released by Conab (National Company for Food Supply), based on Cotlook A Index, CIF Sao Paulo, averaged 2.8513 BRL (0.820 USD) per pound last week, 2.25 percent up compared to the previous week (at 2.7660 BRL or 0.794 USD per pound). In this case, Conab consider dollar at 3.4804 BRL.
(By Commoditiescontrol Bureau; +91-22-40015532)
0 Comments 
Post Comment 
