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Brazilian cotton sector signs agreement with Chinese association to boost sales

Posted by Mateus Ramos

Image: Pixabay



The Brazilian Association of Cotton Producers (Abrapa) signed this Tuesday a memorandum of understanding with the China Cotton Association (CCA) in order to promote the trade of feather to the Asian country and strengthen Brazil's relationship with the largest global buyer of the commodity.

Abrapa's president, Júlio Cézar Busato, told Reuters that the agreement will be of great help to the sector, as it will allow an increase in the exchange of information with China, destination of about 35% of Brazilian cotton in the current season.

"They will be able to tell us what restrictions exist in the Chinese market, any problems that Brazilian cotton may have, so that they can be corrected ... it is a way to better understand the demand," said he, who did not mention how much the agreement could raise Brazilian exports.

In addition to this, Abrapa intends to close deals with other Chinese entities and other cotton-buying countries in Asia, added Busato.

Currently, Brazil is the second largest supplier of cotton to China, behind only the United States, and has managed to maintain the "market share" it gained during the trade war between Washington and Beijing.

Busato said that the Americans have been in the Chinese cotton market for a long time and already have agreements along the same lines as that signed between Abrapa and CCA.

"That is why (the United States) has arrived where it arrived and we are also going in the same direction," he said, citing that the leadership in supplying the feather is largely due to the level of credibility that American cotton has in China."We need to achieve that too," he added.

According to Abrapa, CCA was created in 2003 and has members ranging from cotton producers to companies in the textile sector and research institutes.

"Expanding commercial relations is what (at the productive end) will bring profitability to the Brazilian farmer. This is what we need to guarantee so that we can increasingly increase the cotton area."



The National Association of Cotton Exporters (Anea) estimates that Brazil should end the 2020/21 harvest with sales between 700,000 and 750,000 tonnes of the plume to China. Up to March, 651 thousand tons were shipped, a number that has already surpassed the total sent to the country in the 2019/20 season, of 570 thousand.

ASIA

After registering this year the best first quarter in history, Anea projects shipments of 2.3 million tons of cotton for the accumulated of the 2020/21 harvest, up 21%.

This is because Brazil has increased sales of cotton not only to China, but also to several Asian countries, said the director of Anea, Miguel Faus.

"We have increased our presence and this relationship effort is made in all these countries, not only in China, so as not to have a concentration and to be able to serve everyone," said the executive, about the existence of an alternative if the Chinese advance in business with the USA, to the detriment of the Brazilian product.

The president of Abrapa pointed out that the association signed a memorandum of understanding with India in January, through the Indian Confederation of the Textile Industry (Citi), "and we are negotiating with others in other buyer countries, such as Vietnam, Indonesia, South Korea, Pakistan. and Bangladesh, as well as another entity in China".

The analyst at Safras & Mercado consultancy Elcio Bento added that the scenario is promising for exports, as, in addition to the heated demand from Asians, Brazil has a favorable dollar, a smaller crop in the United States and a large exportable surplus, since consumption domestic market fell in the Covid-19 pandemic.

He calculates that the Brazilian offer should reach 3.045 million tons in the commercial year 2020/21 (July 2020 to May 2021), compared to 2.53 million in the previous cycle. On the other hand, domestic consumption is expected to drop from 680 thousand to 660 thousand tons - the lowest level in the historical series started in 2004/05.

"In the accumulated result for the current season, 2.23 million tonnes were exported - the largest volume ever recorded in a commercial year - and an amount that exceeds ... the same period last year by 21.4%."

Source: Notícias Agrícolas

This text was aautomatically translated from Portuguese.