According to CEPEA/ESALQ, most companies continue to refrain from closing new cotton trades due to the nearness of Christmas vacation.
Only a few players are operating in this end-of-the-year period in the Brazilian cotton market, it said.
The CEPEA/ESALQ Index for cotton type 41-4 closed at 1.6600 BRL (0.6177 dollar) per pound on December 15, for an increase of a marginal 0.65 per cent compared to November 28.
Cotton growers, in turn, are focused on closing contracts scheduled for the end of the year. At the same time, some trading companies are asking for higher prices, for both exports and the domestic market.
High dollar quotes compared to real (BRL) and increases of futures contracts at ICE Futures reinforced this position.
Between December 8 and 12, Cotlook A Index rose 1.52 per cent as compared to its previous week ending December 5.
In the same period, the dollar average picked up 2.05 per cent and the export parity calculated by Cepea FAS at Paranaguá port averaged 1.5077 BRL per pound, up 3.77 per cent compared to the previous week.
Conab released a new estimate about the Brazilian crop on December 10 and indicated that Brazilian output might drop 11.2 per cent as against the 2013/14 season, to 1.54 million tons.
Among 15 producing states, in only two, Maranhão and Piauí, production and planted area is expected to increase.
“The season reduction is attributed to high global stocks, which have pressed down domestic quotes,” Conab said.
The planted area may drop more than 10 per cent to some 1 million hectares, and the yield is expected to amount to 1,532 kilos per hectare.
Among major producing regions, Conab expects production declines in Mato Grosso at 12.5 per cent; Goiás at 11.5 per cent, Mato Grosso do Sul at 10.9 per cent and Bahia 8 per cent. (AR)
