São Paulo – The Dubai 2011: Open to the World trade fair, held in Dubai on the 15th and 16th this month with the world’s 34 top cotton consuming and producing countries, has brought good news. According to the chairman of the Brazilian Cotton Producers Association (Abrapa), Sérgio De Marco, Brazil and the United States may benefit the most from the growth in demand. The national crop should also keep gaining size until at least 2013, because the planted area in Brazil is going to increase.
According to Sérgio, the event’s goal was not to do business, but rather to promote discussions and presentations to help growers boost their cotton crops and sales. On several occasions, claims the Abrapa chairman, Brazil was listed as a country with potential to produce and sell more.
Last year, however, at cotton growers’ request, the Foreign Trade Chamber of the Ministry of Social and Economic Development exempted 175,000 tonnes of cotton from import tariffs. The exemption will remain in force until May 31st this year. The measure was a solution for supplying the domestic market, which suffered as a result of crop failure caused by rains in the state of Mato Grosso.
This year, 650,000 to 700,000 tonnes of cotton should be exported. There is a demand for more product on the international market, but the lack of infrastructure gets in the way. "We should export 700,000 tonnes at most this year. We are unable to sell more because there are logistics bottlenecks, issues at the ports," claims Sérgio.
If on the one hand the sector suffers from lack of infrastructure, on the other hand there will be an increase in planted area. "According to a presentation at the event in Dubai, our cotton is going to enjoy a good moment until at least 2013. Planted area should grow by 10% to 20% in the country," says Sergio. In addition to the Chinese market, the domestic market should consume more cotton over the next few years. "We have never exceeded 800,000 tonnes, but consumption in Brazil should reach 1.1 million tonnes in the years to come."
There is also a perspective of increase in the price of the commodity, from around US$ 0.80 per pound weight to up to US$ 1.20 per pound weight. Sergio, however, regrets the perspectives regarding the exchange rate. He said that the real (Brazilian currency) should remain appreciated against the dollar for at least five more years.
Exports
According to data supplied by the Ministry of Development, the Brazilian export record was set in 2008. In that year, the country shipped 548,303 tonnes of cotton abroad. Shipments reached 523,563 tonnes in 2009 and 512,971 tonnes last year. According to the Abrapa, exports have continued to drop early this year. In the first two months of 2011, Brazil exported 32,300 tonnes, which represented a 47.75% decline compared with the 61,813 tonnes shipped in the same period of 2010. Among the Arab countries, the top buyer was Morocco. The country imported 543 tonnes, an increase of 54.7% compared with the 351 tonnes imported in January and February last year.
*Translated by Gabriel Pomerancblum
