May 10, 2017

2016/17 Cotton Crop in Mato Grosso Expected to Set New Record

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

The state of Mato Grosso is Brazil's largest cotton producing state and the 2016/17 cotton crop is expected to set a new record production for the state. The weather has been very good in most of the state and certainly better than last year when hot and dry weather negatively impacted the crop. The vast majority of cotton in the state is produced as a second crop following soybeans. The safrinha cotton is planted generally during January and harvested in July or August. The full-season cotton is planted in December and also harvested in July or August.

The Mato Grosso Institute of Agricultural Economies (Imea) is estimating that the 2016/17 cotton production in the state will be 986,600 tons or 12.5% more than the 876,800 tons produced in 2015/16.

Approximately 446,000 tons of the 2016/17 production are destined for the domestic market (52% of the total production) and 479,500 tons are destined for exports (48% of the total production). The domestic consumption is up from the 385,200 tons consumed last year (44% of the total production) due to an improving Brazilian economy.

Not only is the production higher this year, the prices are higher as well up 11% compared to the same time last year and the current prices are the best in two years. Farmers have taken advantage of the improved prices to forward contract 63% of their anticipated 2016/17 cotton production. They have also forward contracted 26% of their anticipated 2017/18 cotton production as well.