Cotton Production and Trade within Brazil
Brazil is the fifth largest country in the world, with a total territory of 8.5 million square kilometers. Similarly, it is the sixth most populous jurisdiction in the world with more than 200 million citizens. Even though Brazil has suffered from negative economic growth in recent years due to the global financial crisis and the low prices on international commodity markets, the country’s economy is expected to grow by 1.0% during 2017. Furthermore, some sectors within the Brazilian economy, such as oilseed production and food retail have remained buoyant throughout the last couple of years. For example, during 2015, Brazil’s food retail sector accounted for US$95 billion.
When it comes to agricultural commodities, the Brazilian soybean sector is expected to yield more than 100 million metric tons during 2016/17. Likewise, almost 60 million metric tons of soybeans are expected to be exported from Brazil, due mainly to a strong demand from Chinese markets. Producing some 1.5 million metric tons of cotton on a yearly basis, Brazil is also amongst the world’s top producers of this valuable agricultural commodity, after India, China, the United States, and Pakistan. This article explores the status of cotton production in Brazil.
Cotton Production and Trade within Brazil
Over the last three years, the total area of land harvested for cotton production in Brazil has decreased slowly, from little over 1 million hectares during 2014/15 to 955.000 hectares in 2015/16 and an expected area of 940.000 hectares for 2016/17. This decrease in production surface is mainly due to the hardships that local farmers have experienced over the last several years because of stagnant economic growth, increased interest rates, and adverse weather variations. Therefore, the Brazilian cotton output went from 1.52 million metric tons in 2014/15 to 1.28 million during 2015/16 and an expected 1.45 million metric tons for 2016/17. Not surprisingly, the season with the highest imports of cotton into Brazil was that of 2015/16 when some 22.000 metric tons of cotton were brought into the country.
Nevertheless, Brazil remains a net exporter of cotton commodities and manufactured products. Since 2014, cotton exports from Brazil have remained constant above 675.000 metric tons annually. The largest international markets for Brazilian cotton are located in the Asia Pacific region and include Vietnam, Indonesia, South Korea, China, and Malaysia. During 2016 alone, Indonesia and Vietnam each imported more than 140.000 metric tons worth of Brazilian cotton respectively.
Similarly, the domestic market demand for cotton in Brazil has remained above 640.000 metric tons annually during the last several years. Within Brazil, the largest cotton producing states are those of Mato Grosso and Bahia, followed by Mato Grosso do Sul and Goais. During the 2015/16 season, Mato Grosso harvested approximately 630.000 hectares producing more than 975.000 metric tons of cotton, while Bahia cultivated some 200.000 hectares yielding more than approximately 310.000 metric tons of cotton. Finally, domestic cotton prices have increased dramatically in recent years from $170 Brazilian Real per pound in January of 2012 to $250 Brazilian Real during October of 2016.
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