Little decreases due to the higher supply

Even with the better demand, Brazilian cotton prices dropped a little at the end of September. The reason is that growers, in need of cash, offered a larger volume. Between Sept 24th and 28th, the CEPEA/ESALQ Index (type 41-4, delivered in Sao Paulo city) decreased 0.8 percent in Real, closing at 1.1898 real or 0.6262 dollar per pound on Friday, Sept 28th. In the accumulated of September, prices downed only 0.36 percent. The monthly average was of 1.1965 real or 0.6297 dollar per pound, 2.63 percent higher that the August one.

The valuation of the Real against the dollar keeps limiting the recuperation of the export parity. Last week (from Sept 24th to 28th), export parity calculated by Cepea averaged 1.0793 dollar a pound, stable from the week before (base Cot A - delivered on Paranagua Port). Compared to the weekly Index average (1.1931 real or 0.6449 dollar per pound), domestic trades are 10.54 percent more advantageous than the international ones.

Regarding the 2006/07 crop, the Conab forecasts a production of 1,524.2 thousand tons. According to the Brazilian Commodity Exchange, until the end of September, 73 percent of this total was already traded.

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