The CEPEA/ESALQ cotton price index increased 5.71 per cent in April 2016, which suggests a rise in cotton prices in the country for the month.

Firm demand and lower supply is the main reason for rise in prices. Processors have been looking for good quality batches and sellers keep firm in asking prices.

The lack of rains in some parts of the central-western and north-eastern regions pose a risk to the quality and quantity of 2015-16 crop.

Besides, the crop area for 2015-16 will be 1.1 per cent smaller, of 965.7 thousand hectares, as compared to the previous year, according to a recent report by Conab. This will bring the overall cotton production down in the country.

Additionally, sales interest for cotton has decreased, despite average prices being 23 per cent higher in the domestic market as compared to the international market. Trades for exports have also been very limited.

The CEPEA/ESALQ cotton price index is a set of prices released by Cepea, a research centre in the University of Sao Paulo, on a daily basis for use by the government, farmers and agribusiness agents. (MCJ)