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Brazil's cotton output surge set to boost global export rankings

04 Oct '23

2 min read

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Brazil is on track to become the world's second-largest cotton exporter, potentially overtaking the US, according to a report from CEPEA.
While global cotton output is expected to decline by 5.3 per cent, Brazil has increased its estimates by 4.2 per cent, aiming for 3 million tons in the 2023-24 season.
Exports from Brazil may rise by 4.9 per cent.

Recent data shows that Brazil is poised to rise in the ranks of the world's major cotton-exporting countries. The anticipated increase in cotton output for the 2023-24 season could position Brazil to become the world's second-largest exporter, possibly overtaking the United States, according to a report from the Center for Advanced Studies on Applied Economics (CEPEA).

According to figures released by the USDA on September 12, global cotton output is expected to decrease by 1.5 per cent for the 2023-24 season compared to the forecast in August, and by 5.3 per cent when compared to the 2022-23 season, amounting to 24.471 million tons. Meanwhile, Brazil has revised its own estimates upward by 4.2 per cent, pegging its output for the 23-24 season at 3 million tons. Conversely, production in India and the United States is forecast to decrease by 2 per cent and 6.1 per cent, respectively, CEPEA said in its latest fortnightly report on the Brazilian cotton market.

For exports, the United States Department of Agriculture (USDA) has downwardly revised the estimates for the world's leading cotton exporters except Brazil. Exports from Brazil are expected to increase by 4.9 per cent, reaching 2.57 million tons between August 2023 and July 2024. The United States is forecast to have the lowest exportable surplus since the 2015-16 season, at 3.32 million tons for the 23-24 season.

In Brazil, the gap between production and consumption is expected to narrow in comparison to the 2022-23 season. However, the country is projected to have its highest ever exportable surplus, estimated at 5.86 million tons.

Domestically, market agents in Brazil have been primarily focused on fulfilling prior commitments to both local and international buyers, as increased freight costs and logistical challenges take precedence over new deals. Despite concerns about low consumption in the retail market, liquidity has risen due to a slight uptick in sales along the textile chain.

Between August 31 and September 29, the CEPEA/ESALQ Index for cotton saw a marginal increase of 0.65 per cent, closing at BRL 4.0738 per pound on September 29.

Fibre2Fashion News Desk (KD)

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