Market participation remained thin as buyers and sellers struggled to agree on prices and quality specifications. Lower international cotton prices also discouraged fresh transactions, further reducing liquidity in the domestic market.
Brazil’s cotton trading remained slow in early June as low liquidity, price disagreements and weaker global prices limited new deals, CEPEA said.
Demand stayed cautious while sellers focused on contract fulfilment.
The CEPEA/ESALQ index fell 0.92 per cent during June 1-8, while export parity rose on a weaker real and higher dollar, supporting exports.
Sellers largely focused on fulfilling existing term contracts while monitoring crop development. According to Brazil’s National Supply Company (Conab), cotton crops remain in good condition. On the demand side, textile mills maintained a cautious stance and showed limited interest in closing new deals.
The CEPEA/ESALQ cotton index, based on payment within eight days, fell 0.92 per cent between June 1 and 8 to BRL 4.1988 per pound. The index was down 1.88 per cent in the month through June 8. Domestic cotton prices remained about 10.1 per cent higher than export parity levels.
Meanwhile, export parity prices strengthened due to currency movements. CEPEA calculations showed export parity FAS (Free Alongside Ship) rose 2.7 per cent during June 1-8 to BRL 3.8764 per pound at the Port of Santos and BRL 3.8869 per pound at the Port of Paranagua.
The Cotlook A Index, a benchmark price indicator for spot cotton on the international market, declined 0.63 per cent to $0.8615 per pound during the same period, while the Brazilian real weakened as the US dollar gained 3.29 per cent to BRL 5.179.
Fibre2Fashion News Desk (CG)
