Brazilian market keeps the good pace

In June, Brazilian cotton market moved at a good pace, since textile mills and wholesalers remain willing to trade. Prices, in turn, oscillated at around 1.16 real a pound, with the CEPEA/ESALQ Index (type 41-4, delivered in Sao Paulo city) accumulating a devaluation of 0.88 percent in the month. Besides the harvest period, the pressure comes from some trades that involved larger volumes. On the other hand, growers' resistance limited the decrease - they kept focused on accomplishing anticipated contracts.

Exports also moved at a better pace for the futures crops. In average, for the cotton from the 2007/08 crop, contracts were closed at 0.6377 dollar a pound. For the 2008/09 crop, trades averaged 0.6448 dollar a pound and for the 2009/2010 crop, 0.66 dollar a pound. For the cotton from the current crop (2006/07), few contracts have been settled. Besides the good volume already traded, the export parity shows lower remuneration for exports. Price parity, calculated by Cepea, FOB Paranagua Port, averaged 1.0355 real per pound on Friday, Jun 29th, 3.64 percent inferior to the average of May 31st, based on Cot A.


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