|
04
Mar 10
Market does not
follow international prices
Since early February, Brazilian cotton prices have not absorbed strong increases
observed in the international market. While low global stocks and higher demand
have supported prices at New York Board of Trade (ICE Futures) and the Cotlook A
Index (Liverpool), in Brazil, on the other hand, prices have remained stable
because purchasers opted for trading only small batches.
In this scenario, not even the Real valuation, 4.2 percent in February, toward
the dollar halted the increase of export parity. According to Cepea, the parity
export at Paranagua port (FOB) raised 9.3 percent in February and averaged
1.3022 real per pound in relation to the previous month, reaching the highest
nominal value since March 2005.
The CEPEA/ESALQ Index for cotton type 41-4 (delivered in Sao Paulo city, payment
in 8 days) decreased 0.69 percent in February and closed at 1.4278 real or
0.7905 dollar per pound on Friday, February 26. The Index averaged 1.4269 real
per pound in February.
According to BBM (Brazilian Commodity Exchange), around 92 percent of cotton
2008/09 crop has already been traded, being that 48 percent is allocated to
exports and 52 percent to the domestic market. In this context, the Brazilian
market will need 372 thousand tons to meet its demand, however, the volume
available is a little over 97 thousand, which means prices are likely to be
sustained. As for the 2009/10 crop, BBM reports that around 39 percent has
already been negotiated until the end of February, being that 76 percent is
allocated to exports, while 24 percent to the domestic market.
CEPEA/ESALQ/BRAZIL |
 |
