Severe droughts hit northeastern
cottonfieldsduringthreeyearsinarow,causingsignificant
damagesandlossesinthe2015/16growingseason
High
pressure
U
nder bad weather conditions,
which for the third year in a
row adversely affected the
cotton fields in the Northeast,
the cotton supply chain har-
vested a crop that was 17.5% smaller in
the 2015/16 crop year. The low sales pric-
es, stemming from the severe economic
crisis, aggravated by the political turmoil;
the exchange rate oscillations and an inter-
national structure characterized by low de-
mandaffectedtheprofitsandrequiredhigh-
er economic and commercial management
capacity fromfarmers and industries.
According to the final figures released by
theNationalFoodSupplyAgency(Conab),in
2016 the size of the cotton crop in the Coun-
try was 1.29 million tons smaller in terms
of fiber, resulting from both the 2.2-percent
smaller planted area (954.7 thousand hect-
ares) and 15.6% lower productivity (1,350
kilograms of lint per hectare). Climate con-
ditions could not have beenworse, as it was
dry at planting time and excessively wet at
harvest in the states of Bahia (second larg-
est producer in Brazil), Maranhão and Piauí.
In spite of the adverse weather conditions,
quality was not affected.
Availability of fiber for export was lim-
ited and, equally because of this, foreign
sales dropped 6%, to 804 thousand tons. In
the domestic scenario, although demand
was scarce, and by virtue of the oscillation
of theNorthAmerican currency, priceswent
up 22% from December 2015 to December
2016, with an arroba rising fromR$ 74.10 to
R$ 90.48. The president of the Brazilian As-
sociation of Cotton Producers (Abrapa), Ar-
lindo de Azevedo Moura, regretted the fate
of the sector. “We must stay focused on
the fact that the cotton farming production
cost is very high – about R$ 8 thousand per
hectare – due to the high demand of invest-
ments involved. Entering into this business
or gettingout of it is very difficult”, he argues
In his view, the number of cotton farm-
ers in Brazil has been on the decline over
the past five years. The blame goes to the
ever-decreasing profits, at a time when oth-
er crops like soybean, whose production
cost remains at R$ 2.5 thousand per hect-
are, offer more liquidity. According to him,
for the supply chain to make progress over
the coming seasons, there is need for glob-
al and domestic consumption to gradually
recover. “In the international scenario, this
will dependonmacroeconomic factors and,
particularly, on the behavior of the Asian
markets”, he comments. “In the domestic
marketweareengaged inavery strongmar-
keting campaign, seeking an 11percent in-
crease in the consumption of fiber over the
next 10 years. The expectation for a gradu-
al recovery of the economy, although taking
longer than previously estimated, is also an
encouraging factor.
Sílvio Ávila
22
