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Throughout the world
The Secretariat of Foreign Trade (Secex), of the Ministry of Development, Industry and Foreign Trade (MDIC), estimates Bra-
zilian fiber exports, January through December 2016, at 804.9 thousand tons of fiber, down 3.51% from the volume shipped in
2015. In the meantime, total revenue from shipments in 2016 amounted to US$ 1.2 billion, down 5.79% from the total reached
from January to December 2015. In Brazilian currency, revenue dropped slightly: R$ 4.2 billion against R$ 4.3 billion in 2015, tak-
ing into consideration the average annual value of the dollar. “In 2016, the average price in dollar, of US$ 0.67531 per pound, re-
ceded 2.7% from the previous year, representing the lowest since 2010”, the report states.
Although Brazil fetched better prices in real, we cannot overlook the fact that the exchange rate was favorable to foreign pur-
chases. From January to December 2016, shipments abroad amounted to 27 thousand tons of lint, almost 13 times more than
the volume purchased in 2015, of 2.1 thousand tons. The acquisitions were related to the lower import prices in 2016, whose av-
erage of US$ 0.8381 per pound was the lowest since 2011.
S
carce availability of fiber in the
Brazilianmarket in2016, because
of losses stemming from two
consecutive crop failures in the
Northeast, had its positive side in
the form of higher domestic prices. Farmers
in Mato Grosso, leading state in cotton area
andvolume,mademoneyfromtheircrops,a
factthatresultedintobiggerareasdevotedto
cotton in thenewgrowing season.
In 2015, cotton prices in Brazil went up
considerably, about 35%, in a scenario of de-
clining stocks and smaller planted area. In
turn, 2016 came to a close with an increase
of 22.69%, according to monitoring servic-
es conductedby the Center for AppliedStud-
ies on Advanced Economics (Cepea) of the
LuizdeQueirozCollegeof Agriculture (Esalq),
linked to the University of São Paulo (USP).
Risingdemandinthefinalquarterin2016had
a say in the higher prices, which continued
steady throughout the first quarter in2017, on
account of the fallow period, the more posi-
tive indicators for the national economy and
clear signsof shrinkingglobal stocks.
In 2016, the average of the Cepea/Esalq
Indicator, payment 8 days after receipt, fiber
length 41-4, delivered in São Paulo, was R$
2.5723 per pound, up 22.5% from2015. The
highest monthly average in 2016 reached
R$ 2.7632 per pound, in May, and the low-
est was R$ 2.5231 per pound, in September.
The blame for the failure of the cotton crop
in theNortheast in the 2015/16 growing sea-
son goes to the unfavorable weather condi-
tions. As part of the fiber had been negotiat-
ed in advance with the market at home and
abroad, some farmers faceddifficulties inde-
livering good quality cotton in the 2015/16
crop year. According to data from the Bra-
zilian Commodities Exchange, 72% of the
2015/16 Brazilian crop had been negotiated
by December 29, split into 51.2% for the do-
mesticmarket and48.8%for export.
According to the annual Cepea report,
in aggregated terms, in 2016, the annual av-
erage of the indicator exceeded by 16.1%
the export parity price, compared to 4.6%
in 2015. Therefore, contrary to 2015, trading
companiesweremoreactivefornegotiations
in theBrazilianMarket almost all over 2016.
Highly
valued
By virtue of the decline in
productionandscarceavailability, fiberfetched
highpricesover2016 intheBrazilianmarket
Sílvio Ávila
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