Cotton prices in Brazilian cotton market resumed their upward trend in the later part of November. In the first fortnight, cotton prices increased slightly but stabilised mid-month only to see rising trend in end of November. This was stated by the Center for Advanced Studies on Applied Economics (Cepea-Brazil) in its latest fortnightly report.
The scenario before the end of the month was linked to the gap between bidding and asking prices which, in turn, was related to the quality of the cotton available in the market. When the quality was high, agents disagreed about the available volume and while some of them believed cotton supply was already low, others claimed that there were still batches to be traded in the off-season period.
However, later in the month, when Brazilian cotton prices resumed, trading companies and cotton growers that were active in the market were firm in their asking prices keeping an eye on the fluctuations of international and dollar quotes and on the low supply of high-cotton-quality from the 2015-16 season. During the second fortnight of November, few processors were seen showing interested in new cotton purchases in the spot market. On the other hand, trades involving cotton for delivery in 2017 were seen at a good pace. Dealers were more active in the spot market, buying and selling cotton batches.
According Brazilian Stock Exchange of Goods (BBM) data tabulated by Cepea, 67.9 per cent of the 2015-16 Brazilian crop estimated at 1.28 million tons had been traded until late November. Of that total, 49.2 per cent was allocated to the Brazilian market while 50.8 per cent to the international market. Regarding the 2016-17 crop estimated at 1.4 million tons, 23.1 per cent has been traded. Of this, 24.5 per cent was allocated to the domestic market and 75.5 per cent to the international market.