In the harvest peak period of the 2006/07 crop, the domestic cotton prices kept almost stable during July. On Tuesday, July 31st, the CEPEA/ESALQ Index closed at 1.1457 real or 1.1539 dollar a pound, down only 1.12 percent in Real and up 9.6 percent in dollar during July. Besides anticipated trades, the low prices level also limits the decreases in Real.
Most part of growers keeps focused on accomplishing anticipated contracts. According to the Brazilian Commodity Exchange, until July 20th, 1,029.3 thousand tons of cotton from this crop (2006/07) were already traded, which corresponds at 71% percent of the total Brazilian production forecast by the National Company for Food Supply (Conab), at 1,456.7 thousand tons.
In a short time, prices should remain stable. Even with the record production forecast by the Conab, the volume available to be traded in the domestic market is low (around 29 percent). Growers should keep focused on accomplishing anticipated contracts.
At the New York Board of Trade (Nybot), cotton prices are at the highest levels since June/04, boosted by the lower production and by the enlargement of the global consumption, which should reduce stocks and support global quotations in the medium term. According to the last USDA report published in the first fortnight of July, the global production for the 2007/08 crop is forecast at 25.2 million tons, 2.2 percent lower than that from the 2006/07 season. The global consumption in the 2007/08 crop should rise 4 percent, to 27.7 million tons.