After decreasing in the accumulated of June and July, Brazilian cotton prices finished August in an upward trend. Growers kept focused on accomplishing anticipated contracts. Textile mills and wholesalers, in turn, were willing to trade, boosting the domestic values. Between July 31st and August 31st, the CEPEA/ESALQ Index upped 4.23 percent in Real, closing at 1.1941 real or 0.6092 dollar per pound on Friday, Aug 31st.
The great volume of anticipated contracts justifies the raises in this harvesting peak period. According to the Brazilian Commodity Exchange, until the end of August, 1,079,122 tons of cotton from this crop (2006/07) were already traded for the domestic and international markets, which represents 71 percent of the total Brazilian production forecast by the National Company for Food Supply (Conab), at 1,520.9 thousand tons.
For textile mills, the second semester usually registers higher manufactured products' sells. For a while, however, cotton lint prices keep stable.
Players were also focused on the estimation about the North-American 2007/08 cotton crop. In the last report, the USDA forecast the production in the United States at 3.8 million tons, 19.64 percent lower than the 2006/07 crop. Exports, in turn, should increase 28.5 percent over the previous season, totaling 3.6 million tons. With the consumption projected at 1 million tons, the final stocks should reduce 40.2 percent (to 1.26 million tons). Global stocks also should decrease, supporting global prices, which can rise 20 percent in the 2007/08 crop (Aug/07 to Jul/08), according to the ICAC (International Cotton Advisory Committee).