Brazilian cotton market moved at a better pace again after the second week of February. In the accumulated of the month (until Feb 15th), the CEPEA/ESALQ Index for the type 41-4 (delivered in Sao Paulo city) decreased 1.73 percent in Real, closing at 1.3912 real or 0.7950 dollar per pound on Friday, Feb 15th.
The Brazilian cotton crop development keeps positive. Growers of the Center-Western region and of the Bahia state remain optimistic about the productivity and the quality of the product.
In global terms, data published on Feb 1st by the International Cotton Advisory Committee (ICAC) show lower inventories in the 2007/08 crop, due to the superior consumption in relation to the production.
Regarding the 2008/09 crop, the global production should increase 1 percent, according to the ICAC, totaling 26.9 million tons. However, the consumption should keep overtaking the production, reaching 27.4 million tons (also increase of 1 percent). Prices average, which in 2006/07 crop was of 0.5915 dollar per pound, should be of 0.67 dollar per pound in the 2007/08 crop (from August/07 to July/08) and remain increasing in the 2008/09 crop.
According to the Brazilian Commodity Exchange (BBM), until the end of January, 84 percent of the Brazilian cotton 2006/07 crop (forecasted at 1.5 million tons) has been already traded. Of this total, 49 percent should be destined to the international market (624 thousand tons) and 51 percent to the domestic one (657 thousand tons). The domestic demand should overtake 1 million tons. Based on these data, it should be necessary 350 thousand tons to supply the domestic demand. However, it rests around 243 thousand tons without register settled, which should be fulfilled by imports.
Between January and December 2007, Brazilian cotton imports totaled 96.8 thousand tons, volume 18.6 percent higher over the same period of the previous year. For 2008, the National Company for Food Supply (Conab) forecasts the Brazilian imports at 60 thousand tons.