Starry
cottonfields
B
razil’s cotton farming business
got off to a good start in 2017,
projecting productive and prof-
itability recovery of the fields
and cotton based products. The
2016/17 cotton crop and the scenario of the
market are confirming this trend, anticipat-
ingatimeofgreatavailabilityoffiberinBrazil,
in light of crop failures in other countries and
declining global stocks, besides remunerat-
ingprices, despite thehighproductioncosts.
With about 70%of the cropmarketed in
May,pricesoverthefirsthalfoftheyear–off-
season quotes – had been promising and
within projections, with the farmers earning
a 6% to 8% higher income, and the trend is
for the prices to continue rising throughout
the year, depending on the region. Domes-
tic and international prices suffered slight
changes, and the blame goes to the lower
Brazilian crop in the season.
According to ArlindoMoura, president of
the Brazilian Association of Cotton Produc-
ers (Abrapa), the contamination of the eco-
nomic scenario stemming from the political
turmoil couldhave anunpredictable impact
upon theprices of the fiber. Hehad it that an
evenbigger devaluationof the Brazilian cur-
rency against thedollarwould translate into
gains for the farmers, inour national curren-
cy. “Although having a firm market whose
pillars lie on quality and price, a highly val-
ued dollar against the real could generate
more competitiveness”, he recognized.
Upuntilmid-May, the sector was expect-
ing stable sales, with prices remaining un-
changedinthelevelsindicatedbythemarket
andbytheNewYorkStockExchange,butwas
thenunexpectedlyhit by thepolitical turmoil
thatdirectlyaffectedPresidentMichelTemer.
It triggered exchange rate oscillations and af-
fected commercial questions, but the supply
chain understands that the fiber market has
enoughmechanisms tomake sure commer-
cialization remains stable.
“In general, in spite of the ebullient in-
ternal political questions, we expect a year
of normal sales with prices that will make
up for cotton farmers’ investments”, Mou-
ra comments. “Market bases are quite fa-
vorable, particularly by virtue of the falling
stocks, with demand on the rise and our
production volumes are returning to the
levels prior to the years of climate induced
damages”, he stresses.
For the 2017/18 season, the projection
is for a slightly bigger planted area in Bra-
zil, with the expectation of normal weather
conditions. With the confirmation of good
sales prices in the 2016/17 crop year, the
Northeast shouldbe responsible for the big-
gest increase in area. The international sce-
nario points to an additional slight reduc-
tion in the stocks and a bigger share of the
Brazilian cotton in the globalmarket. On the
other hand, Abrapa and the affiliated com-
panies are engaged in campaigns that in-
tend to stimulatenational consumption, en-
couraging the local industry, stimulating the
local industry to use cotton instead of syn-
thetic fibers. “Perspectives are promising
andwe are confident”, Moura summarizes.
remunerativepricesencouragetheBraziliancottonsupply
chaininthe2016/17growingseasoninpursuitofprofitability
Expectations for a huge crop and
Sílvio Ávila
Conjunctural scenarios at home andabroad suggest the development of the sector
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