Stable prices in a slow market

Brazilian cotton market moved at a slow pace in March. Besides the retreated demand, growers kept firm about prices. In this context, domestic values remained stable. From February 29th to March 31st, the CEPEA/ESALQ Index for the type 41-4 (delivered in Sao Paulo city) increased only 3.3 percent in Real, closing at 1.4221 real or 0.8126 dollar per pound.

According to the Brazilian Commodity Exchange (BBM), until Mar 28th, 1.35 million tons of the cotton from 2006/07 crop was already traded, which represents 89 percent of the total projected by the Conab (1.52 million tons). Of this total, 726 thousand tons are directed to the domestic market, and the 626 thousand tons, to the international one.

For the cotton from the 2007/08 crop, until Mar 20th, the commercialization totaled 862 thousand tons, which represents 55 percent of the total projected by the Conab (1.56 million tons). Of this total, 204 thousand tons are directed to the domestic market, and the 658 thousand tons, to the international one. The national consumption for the 2007/08 crop should total 1.05 million tons - Conab.

In global terms, the International Cotton Advisory Committee (ICAC) forecasts the 2007/08 cotton crop production at 25.99 million tons, 2.8 percent inferior over the 2006/07 crop. The consumption should reach 27.14 million tons, rising 1.84 percent in relation to the previous crop. As a consequence, the final stocks should reduce 8.66 percent, to 11.6 million tons. Exports are projected to total 8.8 million tons. (Cepea - Brazil)

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