MUMBAI (Commoditiescontrol) - Demand for cotton in Brazilian markets seen declining as with harvesting almost finished and advancing grinning, processors are getting required quantity of the commodity in market.
Wholesale agents, however, are more active, buying cotton to accomplish contracts. Good part of negotiations in the spot market involves small batches with various types.
Sellers are also focused on accomplishing contracts and, thus, it is normal to ask higher prices in the spot trades. In general, some batches have quality problems.
Between September 21 and 28, the CEPEA/ESALQ Index, with payment in 8 days, for cotton type 41-4 (including freight to Sao Paulo city) increased 0.64 percent, closing at 2.3479 BRL/pound (0.575 USD) on Monday.
The average prices in September (until 28th), at 2.3183 BRL/pound (0.595 USD), is 5.3 percent up compared to August/15 and 27.35 percent higher than in September/14 (values deflated by IGP-DI from August/15) - it is the highest level since March/14.
Last week, the export parity calculated by CEPEA, FAS (Free Alongside Ship) at Paranagua port, averaged 2.3430 BRL (0.580 USD) per pound, 1.07 percent up compared to the previous week (from September 14 and 18). In the same period, Cotlook A Index decreased 3.25 percent and dollar rose 4.44 percent regarding Real.
According to a report released by the Goias Association of Cotton Producers (Agopa) last week, harvesting of the 2014/15 crop is almost finished in most regions of Goias State. As well as in Mato Grosso State, reported the Mato Grosso Association of Cotton Producers (Ampa).
Despite higher export parity, pushed up by dollar valuation regarding Real, traders are less interested in closing contracts for exports. At the same time, quality problems and the good amount already traded led producers to focus on accomplishing contracts. It is good to remind that Cotlook A index decreased 3.4 percent in the last seven days, pushed down by international instability.
Regarding Brazilian exports, the Foreign Trade Secretariat (Secex) data pointed that, until the end of the third week of September, the daily average of shipments was 4.6 thousand tons, 91.7 percent higher than the average of August/15, but 31.2 percent down regarding September/14. The average of daily revenue is 7.4 million dollars, 93.4 percent higher than the 3.8 million dollars registered last month. The average price, in dollar, increased 0.2 percent compared to August/15, at 1,600.9 USD/ton (0.7262 USD per pound).
(By Commoditiescontrol Bureau; +91-22-40015532)
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