Home / Knowledge / News / Textiles / Cotton acreage may fall 40% in Brazil – Plexus report
Cotton acreage may fall 40% in Brazil – Plexus report
07
Jul '12
Plexus Cotton Limited reported that the ongoing heat wave, which has gripped most of the United States since the middle of June, continued to be the main story this week. While the cotton market seems to be unfazed by this weather event, grain and soybean prices continued to explode towards their all-time highs.

The cotton market doesn’t seem to care much about grain and soybean prices at the moment and instead focuses on the bearish cotton story (huge ending stocks, defaults, economic woes).

Even though this huge price disparity that currently exists between cotton and soybeans/corn has no bearing on crops that are already in the ground, this will likely change once the time to make future planting decisions arrives.

At the current ratio between cotton and its competing crops we expect to see a significant drop in cotton acres!  Brazil will probably be the first major cotton producer that reacts to this enormous price difference and we would not be surprised to see cotton acreage drop by 30-40%. Others will follow next spring, including the US Delta and Southeast.

Even without major weather problems, this trend towards “food acres” will continue over the coming years, as it becomes increasingly difficult to meet the ever-rising demands of a growing global middle class. In such a scenario the last thing cotton can allow to happen is to make itself even more unattractive than it already is, otherwise we will all be wearing polyester some day.

Today the People’s Bank of China, the ECB and the Bank of England announced additional measures to shore up their sagging economies. China cut its one-year lending rate by 31 basis points and the deposit rate by 25 basis points, while the ECB dropped its benchmark interest rate by a quarter percent to 0.75 percent, the lowest level since the Euro was created in 1999. The Bank of England left its rate unchanged at 0.5 percent and instead opted to infuse another 50 billion British Pounds into the economy.

These moves come as no surprise, as cutting rates and printing money are unfortunately the only bullets left to combat deflationary forces. If left alone we would see a massive implosion of asset prices, but governments and central banks will do whatever it takes to prevent this from happening.

There is really no contest, because central banks have unlimited powers in regards to money printing and they will ultimately succeed in inflating assets back up. However, the heavy price to be paid for this unfettered money printing is the debasement of currencies and potentially the end of the current financial system.

July corn futures closed at 7.73 dollars/bushel, which is not far from the record 7.99 dollars/bushel set just over a year ago. Nearby corn futures have rallied by 2.22 dollar/bushel since making a low of 5.51 dollars/bushel on June 1.

What is unusual about the current heat wave is that it is occurring so early in the summer, therefore breaking all kinds of temperature records. Just last week alone there were over 2000 heat records matched or broken in the United States.


Must ReadView All

US announces final CVD on fine denier PSF from China, India

Textiles | On 19th Jan 2018

US announces final CVD on fine denier PSF from China, India

The US secretary of commerce Wilbur Ross recently announced the...

EU consumers to gain from cheaper, safer, better e-payments

Apparel/Garments | On 19th Jan 2018

EU consumers to gain from cheaper, safer, better e-payments

European consumers can now reap the full benefits of paying online...

Courtesy: Epson

Textiles | On 19th Jan 2018

Epson's new SC F2100 enhances DTG printing

Epson, a leader in inkjet printers and digital textile printing...

Interviews View All

Mohammad Mamun Ar Rashid
UL VS Bangladesh Ltd

Productivity, creativity and innovation play a vital role in the growth of ...

Anavila Misra
Anavila Collection

Fashion shows are also encouraging and highlighting sustainable fashion

Pratik Bachkaniwala
Palod Himson Machines

Fabric processing machines are picking up

Liz Manning

<div><b>Liz Manning</b>, Business Development Manager at Catexel, has...

Tejas N Patel, Navin D Patel

Founded in 1999 by Navin Patel in the name of Tejas Fabrics with 100...

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

January 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.1%
No
13.4%
Skip
17.5%

Total Votes: 97

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.9%
No
28.9%
Skip
7.2%

Total Votes: 97

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.6%
No
9.3%
Skip
3.1%

Total Votes: 97

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
82.5%
No
8.2%
Skip
9.3%

Total Votes: 97


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search