Brazil is on the verge of becoming the world's largest cotton exporter, potentially surpassing the United States. This shift is attributed to a significant surplus in Brazil and decreased supply from the US, according to a report from the Center for Advanced Studies on Applied Economics (CEPEA).

The 2023-24 cotton planting season in Brazil is expected to benefit from delays in soybean sowing in the Cerrado region, maintaining a high surplus through 2024 and into 2025. Consequently, Brazil is projected to emerge as the third largest cotton producer globally in the 2023-24 season.

CONAB, the Brazilian National Supply Company, forecasts that the 2023-24 Brazilian cotton production will be the second largest in history, only 3.5 per cent lower than the 2022-23 season, reaching 3.061 million tons. Despite an 8 per cent decrease in productivity per hectare compared to the previous year, the cultivated area is anticipated to expand by 4.9 per cent to 1.745 million hectares, the largest since the 1991-92 season.

The combined production, initial stocks, and imports are expected to result in a record domestic availability of 5.2 million tons in 2024. Domestic consumption is projected to reach 730 thousand tons, marking the highest level in a decade, and representing a 7.35 per cent increase from the previous season, CEPEA said in its latest fortnightly report on the Brazilian cotton market.

As a result, Brazil may achieve an unprecedented surplus of nearly 4.5 million tons. Out of this amount, 2.5 million tons are expected to be exported in 2024, leading to final stocks of 2 million tons by December 2024.

Global exports, as forecast by the United States Department of Agriculture (USDA), are estimated at 9.395 million tons. Brazilian shipments for the 2023-24 season (August 2023 to July 2024) are estimated at 2.504 million tons, a significant 72.8 per cent increase from the previous season and the highest in history, trailing the US by just 5.7 per cent.

Brazil may intermittently claim the title of the world's biggest exporter based on cumulative 12-month shipments. Between August and December 2023, Brazil exported 1.02 million tons of cotton, and total shipments for the year amounted to 1.5 million tons, as per Secex data.

Fibre2Fashion News Desk (KD)

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