Cotton prices in the Brazilian market were seen recovering in early June, mainly driven by the need to purchase in the short-term and to the expectation of delay in the availability of cotton.
“Purchasers with needs for prompt delivery, such as cotton processors in the northeastern and southern regions, were accepting asking prices of sellers,” the latest CEPEA Brazil report informed.
The CEPEA/ESALQ Index for cotton type 41-4 and for payment in 8 days, which includes freight to São Paulo city rose 3.56 per cent in the first half of June.
“The Index closed at 2.1019 BRL per pound or $0.671 per pound on June 15. However, if compared to May 2015, the price declined by 1.33 per cent,” the agency added.
CEPEA calculations showed that in the first fortnight of June, export prices for shipment between July and December 2015 averaged $0.6867 per pound, 1.21 per cent down from the average in May 2015.
For shipments up to the second quarter of 2016, the average stands at $0.7036 per pound, a drop of 2.6 per cent, again against the average of the previous month.
Between June 8 and 12, the export parity calculated by CEPEA for Free Alongside Ship (FAS) at Paranaguá port stood at 1.9334 BRL or $0.621 dollar per pound, down 1.11 per cent from the period between June 1 and 5.
According to CEPEA, in the same period, Cotlook A Index increased 0.21 per cent and the dollar decreased 1.28 per cent against the BRL.
The import parity data released by CONAB, based on Cotlook A Index, CIF São Paulo averaged 2.5293 BRL or $0.813 per pound, moving down 0.72 per cent compared to the first week of June.
