MUMBAI (Commoditiescontrol) - Cotton prices in Brazil stayed firm in Brazil in the week ended July 6-13, according to the CEPEA. Slow cotton supplies and buyers needing to trade is pushing quotes up in the first fortnight of July. In the upcoming weeks, advance of harvesting should make cotton farmers turn their attention to accomplish delivery cotton from contracts.
Between July 6 and 13, the CEPEA/ESALQ Index, with payment in 8 days, for cotton type 41-4 (including freight to Sao Paulo city) increased 1.22 percent, closing at 2.1239 BRL per pound (0.677 dollar/pound) on July 13. In the accumulated of July (until 13th), the Index is 0.86 percent higher than the average of June/15 and 8.3 percent higher than the average of July/14, at 2.1071 BRL per pound (0.666 dollar/pound) - values deflated by IGP-DI from June/15.
Cold weather and rains in most producing regions worries Brazilian producers especially those who already started harvesting. According to the report from Mato Grosso Association of Cotton Producers (AMPA), between June 28 and July 4, harvesting in Mato Grosso was slow due to the cold weather.
Some sales to international markets have been done especially for 2015-16 crop, but quotes have not been settled yet. Dollar rising against the Real in the last seven days pushed up export parity, as the Cotlook A Index and future contracts at ICE Futures decreased. These drops can also limit closing new contracts.
Brazilian cotton production might total 1.5 million tons in the 2014-15 season, 13.2 percent lower than in the previous crop due to the decrease in seeded area. Yield should average 1,543 kilo per ha, almost the same as last crop (-0.2%). In Mato Grosso, main Brazilian producer, harvest should be 14 percent higher. In the Northeast, second main producing region, production can drop 8.5 percent, as per the CONAB data.
From May/15 to June/15, the Foreign Trade Secretariat (SECEX) showed that Brazilian exports dropped 1.7 percent, to 18.091 thousand tons. But in the partial of 2015 (until June), exports are 38 percent higher than in the same period in 2014, totaling 379 thousand tons. Revenue from exports totaled 26.2 million dollars in June, 1.5 percent down compared to May. Brazil’s imports dropped 1.8 percent in June compared to May, totaling 158.6 tons, a decrease of 85 percent in the accumulated of 2015.
Between July 6 and 10, export parity calculated by CEPEA, FAS (Free Alongside Ship) at Paranagua port, at 2.0116 BRL (0.630 dollar) per pound, increased 1.45 percent compared to last week (from June 29 to July 3). In the same period, Cotlook A Index decreased 0.76 percent and dollar increased 2.17 percent regarding Real.
In the same period, the import parity released by CONAB (National Company for Food Supply), based on Cotlook A Index, CIF Sao Paulo averaged 2.6182 BRL (0.820 dollar) per pound, 0.7 percent up compared to the previous week (at 2.6000 BRL or 0.814 dollar per pound). Dollar used in this case was 3.1909 BRL.
(By Commoditiescontrol Bureau; +91-22-40015534)