Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers’ strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
In the second half of the year, however, cotton quotes dropped, pressed down by the arrival of some batches from the new season (2017-18) and the weak performance of by products sales in the Brazilian market, the Center for Advanced Studies on Applied Economics (CEPEA) said in its latest report on Brazilian cotton market.
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
In 2018, the CEPEA/ESALQ cotton Index, with payment in 8 days, rose 15.04 per cent, closing at 3.0657 BRL per pound on December 28. In the first half (December 28, 2017 to June 29, 2018), the Index increased a staggering 35.2 per cent. In the second half of the year (June 30 to December 28), however, the Index dropped 15 per cent. Thus, the annual cotton price average, at 3.1713 BRL per pound, was 21.5 per cent higher than that in 2017.
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
By the end of the year, cotton farmers have already sold most of the product despite the large volume harvested in the 2017-18 crop. Hence, the batches available in the spot market are of lower quality.
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
In the first four months of 2018, liquidity was high in the Brazilian market, since processors and traders were active in the market, searching for cotton to meet immediate demands, replenish inventories or for scheduled deliveries.
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
In May, the truckers’ strike hampered the trades for quick delivery. As a result, Brazilian cotton prices, which had been rising since November 2017, reached the highest level in the year on June 20, at 3.8079 BRL per pound. At the end of the month, however, quotes resumed dropping, pressed down by both the arrival of some cotton batches from the 2017-18 crop at the spot market and the retraction of some purchasers, who were waiting for the harvesting to step up.
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
In real terms (IGP-DI from November 2018), the Index monthly average in June 2018 reached 3.8322 BRL per pound, the highest since May 2011.
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
The delays in the harvesting and processing of the 2017-18 crop underpinned quotes in July and August, when supply is usually high. The large volumes previously traded in both the Brazilian and the international markets made agents attentive to these deliveries. At some moments, some processors had to return to the market in order to close new deals, due to the delays and/or because the product did not meet the expected quality.
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
In September, as part of the cotton processed was allocated to scheduled deliveries, prices were underpinned in Brazil. In October, however, sellers were more flexible, due to the low quality of the product available. Besides the heterogeneity of the batches, purchasers claimed difficulty to find cotton with the features desired. Thus, only small volumes were purchased when deals were closed.
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
The complaints about quality continued in November and the competition regarding price and quality was high. Thus, after oscillating most of the month, quotes remained stable. As for future trades, in November, processors seemed interested in trading the product to deliver in the first half of 2019 as well as the cotton from the 2018-19 crop, at fixed prices or based on the Index. In December, agents gave preference to delivering the cotton previously purchased, due to the nearness of the holiday season.
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
The Brazilian 2017/18 cotton crop totaled 2.005 million tons, a record and 31.1 per cent larger than the previous, according to the National Supply Company Conab. The area allocated to cotton increased 25.1 per cent, influenced by both the higher return compared to the remaining rotating crops and expectations for higher cotton prices. The average productivity increased 4.8 per cent compared to the 2016-17 season. (RKS)
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
Cotton prices in the Brazilian market remained at high levels in 2018, mainly in the first half, due to low domestic inventories, positive exports parity and truckers' strike in May. The good exports performance in 2016-17 season limiting the domestic supply, high international prices and US dollar appreciation against real also influenced the price.#
ALCHEMPro News Desk – India
marketing@alchempro.com
