Cotton: 2019/2020 crop promises to repeat 2018/2019 success

Posted by Marina

Reaching the middle of the 2019/2020 crop year, the expectation of cotton producers, exporters and market specialists is for a good cycle for fiber in production and productivity, repeating the sector's performance in 2018/2019. Brazil must harvest 2.8 million tons and has the challenge of exporting 1.95 million tons. These themes and the uncertainties about the possible impacts of the coronavirus and the trade agreement between the United States and China were discussed this Thursday (01/13), in Brasilia, at the 14th Crop Forecast Meeting, promoted by the National Association of Exporters of Cereals (Anec) and the National Association of Cotton Exporters (Anea).

The president of the Brazilian Association of Cotton Producers (Abrapa), Milton Garbugio, and representatives of the various cotton-growing states of Brazil were present at the event, which also evaluated the performance for soybeans and corn in the country. The opening of the event was attended by the Minister of Agriculture, Livestock and Supply, Tereza Cristina and the director of the Agribusiness Promotion department of the Ministry of Foreign Affairs, Alexandre Peña Ghisleni.

“This meeting is very important, since it makes an X-ray of the harvest and the market situation, which can guide many of our decisions, not only for the cycle that is underway, but for the next one”, considers Garbugio. According to the president of Abrapa, after planting within a favorable climate window, crops are developing as expected. He highlights the historical numbers achieved in exports, with emphasis on the month of January, when the country shipped 309 thousand tons of feather. “Far beyond what we expected,” he celebrates.

Records

For the president of Anea, Henrique Snitcovski, three important brands for the cotton sector have already been achieved in this harvest. “In the second half of 2019 alone, Brazil broke a record, exporting more than one million tons in six months. During the second half of last year, in a single month, it also registered a record of 288 thousand tons. If we add the volume that was shipped in January, everything that Brazil has already exported from July to January is more than it did in other harvests, in the period of the complete cycle, which runs from July to June every year ”, reveals.

The coronavirus is now a major discussion in the sector, as Asia represents more than 85% of Brazilian cotton exports. According to Snitcovski, Brazilian shipments of the featherweight so far have not been impacted.

Global demand

For the invited speaker, Marcos Rubin, the need to reverse the trend of falling global cotton consumption, today around 26 million tons, will be essential to mitigate possible effects of the virus on the market and also of the agreement between the United States and China. Currently, demand and production of the feather are very similar, after six years of slightly higher consumption. “It would be essential to have a heated demand to deal with a trade war, but the scenario now is one of uncertainty, mainly regarding the coronavirus. Exporting 1.9 million tons in 2020 would make the sector a successful year, ”he says.

“We have constant negative reviews of consumption expectations, most likely, derived from the trade war, and the very agreement of this dispute between the United States and China, which offers a certain risk to Brazil's export volumes. China was a great partner in 2019 and must also be in 2020. But for exports to be performed, there is the issue of the coronavirus, for which we have no answers as to how it can unfold from now on ”, he ponders.

Exchange

According to Rubin, the appreciated exchange rate is compensating even when the prices of the commodity are around 75 cents per pound. “There is still a stimulus for expanding the area. A good part of the cotton sector is absorbing the investments that have been made in the last three years. As these investments are amortized, the exchange rate becomes a stimulant ”, he says.




Fonte: Notícias Agrícolas