Jun 27, 2018

Brazil to Surpass Australia in 2018 as Third Largest Cotton Exporter

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

Brazil is famous for its soybean production and Brazil will likely surpass the United States this year to claim the number one spot in world soybean production. Brazil is also coming on strong as the second largest corn exporter after the United States.

What most people do not realize though is that cotton production has surged in Brazil over the last two years. So much so, that Brazil will surpass Australia as the third largest cotton exporter in 2018 and then they are poised to surpass India in 2019 as the second largest cotton exporter in the world. The United States is still the largest cotton exporter with approximately 40% of the market.

Cotton farmers in Brazil are expecting to harvest another record large cotton crop in 2017/18. According to the president of the Brazilian Association of Cotton Producers (Abrapa), the cotton acreage in Brazil increased 26% in 2017/18 and it has increased 60% over the past two years. For the 2018/19 growing season they are expecting the cotton acreage to increase another 12.5% to 1.33 million hectares. If the weather cooperates in 2018/19, the cotton production in Brazil could be 2.26 million tons.

The cotton produced in Brazil is also of good quality and equal to the quality of U.S. cotton. Australia still produces the best quality cotton due to the climate and the nature of cotton production in Australis where 100% of the cotton is irrigated.

The cotton produced in the cerrado region of Brazil is planted during the rainy season, but harvested during the dry season, which helps to maintain the high quality. Only 4% of Brazil's cotton is irrigated due in part to the high cost of electricity needed to run the pumps.

Cotton is produced in two regions of Brazil. The main cotton producing state is Mato Grosso where the vast majority of the crop is planted as a second crop after the first crop of soybeans is harvested. The ideal time to plant the safrinha cotton is during the month of January. Cotton competes directly with safrinha corn for acreage in Mato Grosso.

The second area of production is in northeastern Brazil, mainly in the state of Bahia where it is planted as the main crop. Cotton in northeastern Brazil is planted in December and January and it competes primarily with soybeans for acreage.