Brazilian cotton index rose 12.3 per cent between April 30 and May 30 and cotton prices increased in the Brazilian market in May. This is owing to the lower 2016-17 supply and the slow pace of the 2017-18 harvesting.
During the month, growers, trading companies and/or traders only had a few batches to offer. Some of them seemed to be accomplishing contracts involving the 2016-17 crop.

On the other hand, buyers showed interest in new acquisitions in the spot market, even for mixed quality batches. However, only some agents agreed to pay the prices asked by sellers.

In general, processors were finding it difficult to pass on the price rises of raw material to by-products. So some of them reduced the production pace and worked only with stocked cotton. Others opted for purchasing 100 per cent thread and/or mixed, lowering the need for cotton.

The May 21 truckers’ strike, due to rise in fuel prices, hindered transportation, resulting in reduced trade in the spot market.

Meanwhile, 75.1 per cent of the 2016-17 Brazilian crop (estimated at 1.529 million tons) had been traded until May 29. Of this total, 61.9 per cent was allocated to the Brazilian market, 27.5 per cent to the international market, and 10.6 per cent to flex contracts (for exports, but with an option to sell in the domestic market).