Stable prices due to growers’ retreat

Brazilian cotton prices have kept stable. On October 15th, the CEPEA/ESALQ Index (type 41-4, delivered in Sao Paulo city) closed at 1.1879 real or 0.6563 dollar per pound, a little decrease of 0.16 percent over Sept 28th.

Buyers are more willing to trade. Growers, however, remain focused on accomplishing anticipated contracts. Besides, some of them, more capitalized, are firm about the values offered. Other growers prefer to wait for trading in the off-season period (from January /08 on), at higher prices.

Regarding the planting of the 2007/08 cotton crop, activities should start this month. However, in some states, like Sao Paulo and Paraná, the lack of rain could delay the process.

According to the first forecast about the 2007/08 cotton crop published by the Conab (National Company for Food Supply), the cultivated area should reduce 25 percent in the average of Sao Paulo state and 27.5 percent in Paraná over the previous crop. However, altogether, these states represent only 2.88 percent of the total area projected. In general terms, the Brazilian production should total 1,615.10 thousand tons, increase almost 6 percent over the 2006/07 crop.

In relation to Brazilian cotton exports, the volume exported in September totaled 67 thousand tons, 53.3 percent higher than that of August, according to the Secex (Foreign Trade Secretariat). From January to September, exports amount to 207,436 tons, increasing 20.19 percent over the same period 2006.

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