Jul 06, 2010
Cotton Acreage to Increase in Brazil at Expense of Soybean Acreage
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Farmers in Brazil are expected to increase their cotton acreage 15% to 20% more during the 2010/11 growing season as compared to 2009/10. According the Mato Grosso Cotton Producers Association, the cotton acreage in Mato Grosso, which is Brazil's largest cotton producing state, could increase up to 15% from 422,000 hectares to 483,000 hectares. Cotton acreage in Bahia is expected to increase 50,000 hectares next year and in Goias it is expected to increase 25,000 hectares. In all of Brazil, 836,000 hectares of cotton were planted last growing season.
In Mato Grosso and in other regions of central Brazil, the majority of the increase in cotton acreage is expected to come at the expense of soybean acreage. Current soybean prices in Mato Grosso are not very encouraging, whereas cotton prices are some of the highest in recent years.
It is estimated that Brazilian cotton producers have already forward contracted 30 to 40% of their anticipated production due to the attractive prices. By the time the cotton is planted, Brazilian producers normally forward contract between 50 to 60% of their anticipated production. Cotton is normally planted in Brazil during December and January and harvested in June or July.
Part of the reason for the improved cotton price is the lower than anticipated production of the 2009/10 crop. Up until last week 15 to 20% of the 2009/10 cotton crop has been harvested and production is expected to be down in the principal producing states. Dryness during April, May, and June caused production to be down 15% in Mato Grosso, 5% in Bahia, 10% in Goias, with losses also expected in Mato Grosso do Sul.