In October 2014, Brazil exported 148,500 tons of cotton, which is the highest monthly volume in the last two years.
“This might result in a higher volume of exports in the year, than the one forecasted up until now by Conab, at 660,000 tons for the whole of 2014,” a report from CEPEA informs.
According to the report, cotton prices are mainly moving down since February this year and October brought the certainty, that the current monthly average is the smallest since October 2009.
The CEPEA/ESALQ Index for cotton type 41-4 closed at 1.6580 BRL per pound on October 31, down 0.82% from its previous month.
The industry’s need to purchase defined the market liquidity and price behaviour in October.
At some times, demand triggered price rises, but, after new purchases, buyers refrained and quotes resumed dropping.
As a result, purchasers accepted the asked prices at some times, especially for high-quality batches, and, in others, offered lower prices.
Brazilian Commodity Exchange (BCE) data, collected daily by Cepea, indicates that slightly more than 1 million tons have been traded up until now.
This figure accounts for 59% of 1.73 million tons of the estimated Brazilian cotton output in 2013/14 by Conab.
In October, dollar quotes increased against the real and the average was 4.9% higher than in September.
Consequently, trading companies and cotton producers took advantage to sign contracts to export and close new trades for 2015 and 2016.
In the domestic market, low quality of the 2013/14 season cotton crop, has been limiting trades and bringing forth difficulties in signing new contracts, according to players surveyed by Cepea. (AR)
