CEPEA/ESALQ Index for cotton type 41-4 falls 3.3% to 2.0865 real/lb. on April 15 amid weak demand, low quality

Nevin Barich

PIRACICABA, Brazil , April 22, 2014 (press release) – Cotton prices continue to move down in the Brazilian market, returning to levels observed in November 2013. The low quality of the product available and refrained purchasers have been pressing down values in the domestic market. Moreover, the international price fluctuation and dollar devaluation have been affecting price drops in Brazil.

Between March 31 and April 15, the CEPEA/ESALQ Index for cotton type 41-4 downed 3.25% and closed at 2.0865 real (0.9327 dollar) per pound on April 15.

In general, the industry keeps low the interest to purchase, claiming to have enough stocks to meet the demand in April and May. Moreover, companies are expecting new price drops and, therefore, postpone trades. Cotton growers, in turn, are firm regarding values, mainly for high-quality batches. On the other hand, dealers continue more flexible. Trading companies resumed operating more in the market, affected by dollar decreases against real and uncertainties caused by oscillations in the international market.

From April 7-11, the index for Cotlook A downed 2.47% in relation to the previous week (March 31 – April 4). The dollar average was 2.57% lower than in the week before. The export parity calculated by Cepea FAS (Free Alongside Ship) Paranaguá port averaged 1.7755 real per pound, for a decrease of 5.15% compared to the previous. (Cepea – Brazil)

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