Even in off-season, figures move down

Brazilian cotton market moved slowly during March, with few trades settled. Even with the off-season period, prices decreased. In the accumulated of March, the CEPEA/ESALQ Index for cotton decreased 6 percent in Real and 3.2 percent in dollar, closing this Friday at 1.3309 real or 0.6405 dollar a pound. The pressure comes from the lower demand and the companies' inventories.

The perspectives are optimistic to the Brazilian cotton market. According to the Food and Agricultural Policy Research Institute (Fapri) report, Brazil should be the second highest global cotton exporter from the 2011/12 crop on. Brazilian exports should total more than 1 million tons in the 2011/12 crop, reaching 1.3 million in the 20016/17 crop, below only from the North-American exports.

The global demand should keep increasing and could reach 31 million tons in the 2016/17 crop, according to Fabri. Initially, the higher demand should reduce the global cotton inventories, supporting the prices, which should go from 0.61 dollar a pound in the 2006/07 crop to 0.75 dollar a pound in the 2016/17 crop. These forecast of high global prices should keep supporting the domestic market in the next crops.



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