MUMBAI (Commoditiescontrol) - Cotton prices in Brazil maintained upside trend helped by export parity even if buyers remained cautious in indulging in big deals. Most of the buyers continued hand-to-mouth buying tracking low activity pace in the Brazilian cotton industry.
On the other hand, growers and traders are watching oscillations in the exchange rate and measuring up the volume needed to accomplish contracts for the domestic and international markets.
According to CEPEA collaborators, there are several cases of delays to deliver batches from the 2014/15 crop.
Between September 14 and 21, the CEPEA/ESALQ Index, with payment in 8 days, for cotton type 41-4 (including freight to Sao Paulo city) increased 0.47 percent, closing at 2.3329 BRL/pound (0.586 USD) on Monday. The average prices in the partial of September (until 21th) is 2.3098 BRL/pound (0.602 USD), 4.91 percent up compared to August/15 and 26.88 percent higher than in September/14 (values deflated by IGP-DI from August/15).
The export parity calculated by CEPEA, FAS (Free Alongside Ship) at Paranagua port, averaged 2.3181 BRL (0.597 USD) per pound, 0.11 percent up compared to the previous week (from September 8 and 11). In the same period, Cotlook A Index decreased 0.53 percent and dollar rose 0.64 percent regarding Real.
Regarding the import parity released by CONAB (National Company for Food Supply), based on Cotlook A Index, CIF Sao Paulo, it averaged 3.0037 BRL (0.774 USD) per pound last week, only 0.22 percent up compared to the previous week (at 2.9971 BRL or 0.773 USD per pound).
According to data from the Brazilian Commodity Exchange (BBM) calculated by CEPEA, 46.2 percent of the 2014/15 crop, forecast at 1.533 million tons, had already been traded in the partial of September (until 21th).
From this total, 34 percent was allocated to the domestic market and 66 percent to the international. From the 2015/16 crop forecast by USDA at 1.46 million tons (-4.3 percent), 21.3 percent had been traded.
According to the department, the new crop is reduced due to a smaller planted area, which, in turn, is influenced by higher production costs, pushed up by dollar.
(By Commoditiescontrol Bureau; +91-22-40015532)
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