Higher demand interrupts the downward trend

The successive Brazilian cotton prices decreases were interrupted at the beginning of April. Between April 2nd and 16th, the CEPEA/ESALQ Index upped 2.65 percent in Real and 2.4 percent in dollar, closing the period at 1.3651 real or 0.6647 dollar a pound. Buyers were more willing to settle new contracts. The supply, in turn, keeps restrict in this off-season period.

According to the National Company for Food Supply (Conab - Brazilian government) report published on April 4, the Brazilian cotton planted area should total 1.07 million hectares in the 2006/07 crop. This value is 24.4 percent superior to the one of the 2005/06 crop. The production should be record, reaching 1.42 million tons, 37 percent higher than in the previous season.

Concerning cotton exports, trades have been moving slowly. The few contracts have been traded at around 0.60 dollar a pound for the product from the 2007/08 crop. Price parity for exports, calculated by Cepea, FOB Paranagua Port, averaged 0.9860 real per pound between April 9 and 13, 1.57 percent inferior to the previous week, based on Cot A. These figures keep showing the advantage of domestic trades against exports.



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