Brazil'S Cotton Production Is Facing Challenges In The Coming Year Due To Increased Input Costs

2022/4/2 10:58:00 0

Foreign news on April 1, the Brazilian cotton producers association (abrapa) said that although the investment in cotton quality has increased and cotton consumption has been stimulated, due to the increase in input costs, Brazil's cotton production may face challenges in the coming year.

Julio busato, President of abrapa, said pre-sale sales of crops in 2022 / 23 were lower than in previous years, and cotton production was expected to decline in 2022 / 23 due to concerns about demand as the war in Ukraine affected the global economy.

Although the price of cotton for the earliest delivery on the ice has recently hit its highest level in more than a decade, costs have also risen by about 40 per cent, inhibiting pre sales.

"If input costs and cotton prices remain the same, we should make concessions on cotton acreage to make room for corn and soybeans," busato said "

According to official data, Brazil is the world's second largest cotton exporter. Its cotton production reached a record 3 million tons in 2019 / 20, and dropped to 2.35 million tons in 2020 / 21 due to the impact of the new crown epidemic. It is expected that the output will return to the near historical level again in 2021 / 22. However, the war has once again led to chaos in the business environment.

"Hopefully the situation will stabilize and we can reduce production as we did during the epidemic. We hope that production will reach 3 million tons again in 2022 / 23, but because of the increase in input costs, production will not be that high, so let's hope that production will not fall to 2.5 million tons," he said

Busato said the cotton industry remained deeply concerned about the future because if the major consumer countries were to experience a recession, the impact on demand for cotton could be greater than for other agricultural products, especially food.

Busato said that with regard to the 2021 / 22 cotton to be harvested this year, the situation is quite considerable. About 80% of the output has been sold, with an average price of about 85 cents, which brings good returns.

But busato said the outlook for the next year is not very optimistic. With fertilizer costs rising and many uncertainties, business may not be very active, with only about 10% of potential production being pre sold. 　　