São Paulo – Brazilian cotton exports are growing at a strong pace. From August 2011 to February this year, sales increased by 87.1% compared with the entire 2010-2011 crop year, which starts in August and ends in July of the following year. In comparison with the same period of the last crop, exports have increased by 102.89%, according to information provided by the Brazilian Ministry of Development, Industry and Foreign Trade and disclosed by the Brazilian Association of Cotton Producers (Abrapa).
Some of the reasons for the increased exports, according to the president of the Association of Cotton Producers of São Paulo (Appa), Ronaldo Spirlandelli, were the good harvests, the increase in planted area and crop productivity, and the good prices paid for the product in foreign markets.
“We were able to export more because we have produced more. There was a surplus and we exported it. We are in good terms with the Brazilian industry and selling domestically does not require as much red tape as exports do, so we sell more on the domestic market. However, we had a good crop and we exported our surplus. The industry also benefited from prices paid internationally,” says Spirlandelli.
The producers were able to close deals at US$ 0.90 per pound. The figure, according to Spirlandelli, makes up for production costs and ensures a profit margin to exporters. “This price makes the business sustainable. If we were able to export 800,000 to 900,000 tonnes every year, the market would be balanced,” he says. From August of last year to February this year, 791,300 tonnes of cotton were shipped from Brazil.
The increase in exports, says the Appa president, is also the result of promotional actions carried out overseas by sector businessmen and associations. “We want to attract new buyers and export to more countries. However, we do not grow careless toward our customers, and we always participate in events in places to which we already sell,” he says.
Brazil’s leading competitors are the United States, India and Pakistan. The two Asian countries are the main rivals of the country in the Middle East. In spite of the increased exports in 2011, the share sold to Arab countries did not increase. The bulk of Brazilian sales went to Asia.
According to the Brazilian Ministry of Development, Industry and Foreign Trade, China purchased 15,933 tonnes of cotton from Brazil in February 2012, as against 48 tonnes in February of the preceding year. Sales to South Korea grew by 110% during the period. Sales grew by 380% to Indonesia and 908% to Thailand.
The two leading cotton-producing states in Brazil are Mato Grosso, which produced 723,000 tonnes in the last crop, and Bahia Bahia (405,000 tonnes). According to the Abrapa, Brazil may become the world’s third leading exporter of the commodity this year. Presently, the country ranks fourth. The sector is aiming to maintain the crop size and the volume shipped.
*Translated by Gabriel Pomerancblum
