In the first fortnight of August, cotton prices kept on rising in the Brazilian market, pushed up by the low domestic supply and although harvesting season has begun.
According to a CEPEA report, sellers pulled back and held on to good quality batches, primarily driven by the high export parity due to dollar revaluation against the Brazilian Real.
"Some purchasers increased bid prices, but only small batches were traded in the reporting period," the report added.
The CEPEA/ESALQ Index for payment in 8 days for cotton type 41-4, which includes freight to S?o Paulo city rose 3.02 per cent, closing at 2.220 BRL or 0.637 dollar per pound on August 17.
"The harvesting of the 2014/15 crop has advanced in the main producing regions in Brazil and good quality batches were allocated to contracts, especially for exports," it observed.
In early August, CEPEA registered new exports trades for the cotton from the 2014/15 season and the next 2015/16 season.
The report quoted USDA pointing to a decrease of 6.8 per cent in the 2015/16 global cotton crop compared to the previous season's 23.7 million tons.
"With production declining and consumption rising 2.5 per cent to 24.9 million tons, global stocks should dip 5 per cent," USDA averred.
CONAB has estimated Brazilian cotton production in the 2014/15 season at 1.5 million tons, 13.3 per cent lower than in the previous season.
It also projected that yields would fall 0.3 per cent at 1,541 kg per hectare and acreage would also slip 13 per cent year over year to 976,200 hectares.
