Brazilian Cotton Outlook U.S. Department of Agriculture
Foreign Agricultural Service
Nicolas Rubio –Agricultural Attaché
… and Today is Concentrated in Two States MT and BA Plant 87 Percent of Total Area
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100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
Hec
tare
s (in
thou
sand
s)
PR/SP/MG/GO MT BA
200
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1,000
1,200
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1,600
1,800
500
1,000
1,500
Area Yield
Hec
tare
s (in
th
ousa
nds)
KG
s/HA
Technology Investments Improving Yields Intro of Biotech Varieties
Characteristics of the Sector • Entrepreneurial• Large areas ( > 500 ha)• Professional farmers and groups, partnership w/ ginners and
textile companies• Capital intensive and favors economies of scales • Mechanized harvest• High technology in production and processing• High yields (1.4 - 1.5 mt/ha)• Second-crop cotton now a factor
… While Brazilian Prices Move Up(Monthly Average)
0
50
100
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Feb-
14M
ar-1
4A
pr-1
4M
ay-1
4Ju
n-14
Jul-1
4A
ug-1
4S
ep-1
4O
ct-1
4N
ov-1
4D
ec-1
4Ja
n-15
Feb-
15M
ar-1
5A
pr-1
5M
ay-1
5Ju
n-15
Jul-1
5A
ug-1
5S
ep-1
5O
ct-1
5N
ov-1
5D
ec-1
5Ja
n-16
Feb-
16
Brazil Cotton Prices
BR
cen
ts/lb
s
Followed A-Index trend
Departure from A-Index trend …. Real depreciated 42 percent
Source: CEPEA
2015/16 Cotton Outlook
Brazil:• Area – 950,000 ha (-7%)• Production – 1.50 mmt (-4%)• Exports – 875,000 mt (+8%)• Consumption 675,000 mt (-9%)
2016/17 Cotton Outlook
Brazil:• Area – 970,000 ha (+2%)• Production – 1.54 mmt (+3%)• Exports – 900,000 mt (+3%)• Consumption - 690,000 mt (+2%)
Trade Dynamics in Brazil
ROW16%
Vietnam16%
Indonesia16%
China13%
Korea South12%
Turkey11%
Malaysia10%
Pakistan6%
Brazil Major Export Markets in 2015
Source: GTA
20152014
20132012
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400
Vietnam Indonesia China KoreaSouth Turkey
MT
(in th
ousa
nds)
2015 2014 2013 2012
Brazil Cotton Exports by Year and Destination
USDA Baseline Projections for Brazilian Cotton Production
1.40
1.50
1.60
1.70
1.80
1.90
2.00
600
700
800
900
1,000
1,100
1,200
1,300
1,400
Planted Area Yields
Year 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25
Production (in thousands) 1,524 1,634 1,755 1,833 1,929 2,035 2,131 2,220 2,304 2,388 2,474
Plan
ted
Aer
a(h
a) MT/H
a
… but There Are Challenges to Keep in Mind
• Quality• Competition from other fibers • High cost of production • Pest control (Bicudo/Boll weevil) • Brazil’s infrastructure