MUMBAI (Commoditiescontrol) - Brazilian cotton index in September increased 4.32 percent and closed the month at 2.3552 BRL (0.592 USD) per pound.
Trades closed in September involved small batches with small or medium volume and different types. Sellers remained firm in prices asked even for batches of low-quality cotton, while purchasers were willing to buy cotton to meet the schedule in the short term. In the month, the average of the CEPEA/ESALQ Index, with payment in 8 days, for cotton type 41-4 (including freight to Sao Paulo city) were 0.2 percent higher than export parity.
From the middle of last week until now, the pace of trades in spot markets improved, strengthening price support. Between September 28 and October 5, the Index increased 0.71 percent, closing at 2.3644 BRL/pound (0.592 USD) on Monday.
The monthly average of the Index in September, at 2.3218 BRL/pound (0.595 USD), was 5.45 percent higher than the average of August/15 and 27.5 percent up compared to September/14 (values deflated by IGP-DI from August/15). In nominal terms, the average of September is the highest since April/11. But, if considered the value deflated by IGP-DI, September has the highest average since March/14. In dollar, the Index (cash payment) is the lowest since April/09.
Last week, the export parity calculated by CEPEA, FAS (Free Alongside Ship) at Paranagua port, averaged 2.3162 BRL (0.577 USD) per pound, 1.15 percent down compared to the previous week (from September 21 to 25). In the same period, Cotlook A Index decreased 0.49 percent and dollar dropped 0.63 percent against Real.
According to data from the Brazilian Commodity Exchange (BBM) calculated by CEPEA, 47.4 percent of the 2014/15 crop, forecast at 1.533 million tons, had already been traded in September. From this total, 35.4 percent was allocated to the domestic market and 64.6 percent to the international. From the 2015/16 crop forecast by USDA at 1.46 million tons, 22.5 percent had been traded.
In global terms, forecasts of the International Cotton Advisory Committee (ICAC) released on October 1 for production and consumption were not changed. ICAC had already forecast a decrease of 8.7 percent in global production for the 2015/16 crop, to 31.1 million ha. For trades, ICAC, pointed a volume of 7.62 million tons for the 15/16 season, 0.53 percent up compared to the previous one. According to ICAC, consumption worldwide may increase 2 percent in the 15/16 crop, to 25 million tons.
(By Commoditiescontrol Bureau; +91-22-40015532)
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