CEPEA/ESALQ Index for cotton type 41-4 down 2.4% between April 30 and May 15, averaging 1.9734 real/lb.
Nevin Barich
PIRACICABA, Brazil
,
May 20, 2013
(press release)
–
Refrained purchasers and more flexible behavior of cotton dealers have pressed down the CEPEA/ESALQ Index for cotton type 41-4 (delivered in São Paulo City, 8-day payment) below 2.00 reais per pound in early May. However, cotton growers continued firm in asking prices at the beginning of the month, which limited price drops in the period.
The availability of high quality cotton (31-4 or higher) was low in early May, and trades closed by cotton growers involved mostly low quality batches. However, the main demand was for high quality cotton at the beginning of the month; therefore, dealers who had stocks were able to trade. Some dealers closed new trades to accomplish contracts.
Some purchasers were already supplied until the end of May and, therefore, were only observing the market. Some processing companies which were wrapping up stocks were willing to close new trades, but only to meet the short-term demand.
From April 30 to May 15, the CEPEA/ESALQ Index for cotton type 41-4 (delivered in São Paulo City, 8-day payment) dropped 2.35%, averaging 1.9734 real (0.9740 dollar) per pound on May 15.
Conab (National Company for Food Supply) data released on May 9 indicated that the cropped area with cotton in the 2012/13 season may have totaled 886.7 thousand hectares, 36.4% lower compared to the crop before. The average yield may total 1,422 kilos per hectare, against 1,347 kilos per hectare registered in the 2011/12 season, an increase of 5.6%. The production, in turn, may reduce 32.8%, amounting 1.3 million tons. The domestic consumption may total 887 thousand tons. Exports are forecasted at 612 thousand tons and imports, at 180 thousand tons. Ending stocks of the 2012/13 season are estimated at 426.4 thousand tons.
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