Steady prices, but negative fundaments

Brazilian cotton market has been moving at a better pace with some textile mills returning to the market.

In the manufactured products market, trades keep slow. The main problem, according to market players, is the strict competition with imported products, especially from China. Exchange rate turns things even worst in this point.

The situation is quite complicated. USDA informed that India, Pakistan and Bangladesh are becoming the main consumption area of cotton out of China, and they should produce 90 percent of the total consumption, exporting more and more in the next years.

In Brazil, exports have been calm, as export parity is not attractive at this moment. Contracts were settled at 0.5667 dollar per pound for the cotton from 2006/07 season. For 2007/08, at 0.5825 dollar per pound.


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