MUMBAI (Commoditiescontrol) - Cotton prices in Brazilian domestic markets surpassed export parity by 12.7 percent during 01-05 February, the highest advantage in the last nine months.
As a result, producers and stockists have become active in offloading their stocks in such a situation.
From January 29 to February 05, the CEPEA/ESALQ Index, with payment in 8 days, for cotton type 41-4, delivered in Sao Paulo, decreased 0.45 percent, closing at 2.6082 BRL (0.666 USD) per pound on Friday (05).
Regarding purchasers, many mills were willing to trade and brought small batches for prompt delivery, with lower quality and higher than the 41-4. Some contracts for delivery in the upcoming months and in the second semester (2015/16 crop) were also closed.
Last week, the average of export parity calculated by Cepea, FAS (Free Alongside Ship) at Paranagua port, averaged 2.3225 BRL (0.590 USD) per pound, 3.47 percent down compared to the previous week (January 25 to 29). In the same comparison, Cotlook A Index dropped 0.06 percent and dollar, 3.31 percent against Real.
According to data from the National Company for Food Supply (Conab), Brazilian production of the 2015/16 crop may decrease by 3.6 percent compared to the previous season, reaching 1.51 million tons. Area may be 10.6 percent lower than in the 2014/15 crop, and productivity can reach 1,550 kilo per hectare.
Still according to Conab, Mato Grosso may produce 925.7 thousand tons in the 2015/16 crop, with area 4.3 percent higher and productivity 3.7 percent lower. In Mato Grosso do Sul, production should total 54.2 thousand tons, 2 percent down compared to the previous season.
Regarding the 2015/16 crop, data from the International Cotton Advisory Committee (Icac) released on February 01 pointed global production at 22.46 million tons, 14 percent down compared to the previous season, pressured down by reduction in planted area and in the average productivity. With strong decrease in volume produced, global stocks may drop 7 percent, at 20.5 million tons.
(By Commoditiescontrol Bureau; +91-22-40015522)
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