AgroPages-Brazil's cotton exports could increase 35% in 2019-Agricultural news

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Brazilian farmers are taking advantage of strong cotton prices to increase their cotton production and subsequently their cotton exports. Farmers in Mato Grosso are planning to increase their 2018/19 cotton acreage by 18.1% according to the Mato Grosso Institute of Agricultural Economics (Imea). Farmers are expected to plant 28,800 hectares of full-season cotton and 908,900 hectares of safrinha cotton. Mato Grosso is Brazil's largest cotton producing state followed by the state of Bahia.

Therefore, 97% of the cotton in Mato Grosso will be safrinha cotton planted after the soybeans are harvested. This represents a continuation of the trend to increase the percentage of cotton planted as a safrinha crop following soybeans. The full-season cotton is usually planted in December and the safrinha cotton is usually planted in January.

The president of the National Association of Cotton Exporters (Anec) recently told Reuters that he is expecting Brazil to export 1.7 million tons of fiber in 2019 after exporting 1.25 million tons of fiber in 2018. The 500,000 ton increase would represent an increase of 35%. Anec considers the marketing year for Brazilian cotton to be from July to June.

Brazil's cotton production is expected to increase to 2.5 million tons in 2018/19 compared to 2.1 million tons in 2017/18, but the anticipated cotton exports might be uncertain due to the trade dispute between China and the U.S. China is the largest importer of cotton and the United States is the largest exporter of cotton. How much cotton Brazil exports to China will depend to some extent if the trade dispute between the two countries is resolved by the time Brazil starts exporting cotton during the second half of 2019.

In addition to the trade dispute, generally 60% to 70% of Brazil's cotton exports occur during the second half of the year, but that might fall to 50% to 55% during the second half of 2019 due to a lack of containers. Problems with the availability of containers is already delaying this year's exports by two or three weeks.

Brazil is now the second largest cotton exporter after the United Sates.