National cotton farming has a historic year in 2018/2019

Big marks in production and productivity, historic records in exports and a stronger one in the Chinese market defined the 2018/2019 harvest year for Brazilian cotton farming. The country harvested 2,9 million tons of cotton, on 1,6 million hectares of crops, with a productivity of 1,77 thousand kilos of lint per hectare. For the 2019/2020 cycle, the estimate from the Cotton and Derivatives Chain Sector Chamber of the Ministry of Agriculture, Livestock and Supply (Mapa) is slightly more modest numbers, with a reduction of 2,1% in area, 5% less in volume, and a 3,3% decrease in productivity. Last Wednesday (27/11), the Chamber held the last of the four annual harvest evaluation meetings, this time, in Cuiabá/MT, at the headquarters of the Mato Grosso Association of Cotton Producers (Ampa), with the presence of representatives from the ten producing states, industry, exporters and government.

Despite forecasts that suggest maintenance, in 2019/2020, of the 2018/2019 performance, members of the Chamber say that the numbers are great, and consolidate the role of great player of Brazil in the current configuration of the global cotton map. “From this harvest onwards, we started to influence prices and showed the market that our cotton, which was already recognized for its quality and sustainability, now also has a larger scale and starts to supply the industry over 12 months”, argues the president of Brazilian Association of Cotton Producers (Abrapa) and the Sector Chamber, Milton Garbugio. According to him, less attractive prices on the New York Stock Exchange, in the second half of 2019, “slightly slowed down the impetus of cotton farmers to advance in area”. The value of the commodity cost US$0,57 and is currently quoted at US$0,67.

Exports

Quality, volume and, mainly, consistency in supply were also highlighted by the president of the National Association of Cotton Exporters (Anea), Henrique Sniticovski, as Brazil's strengths among global buyers. “And, in this harvest, we also showed that we are prepared to deliver our cotton at the right time. We broke a historic record in a single month, when we shipped, in October this year, 274 thousand tons of feather. Before that, our highest mark had been in December 2018, with 228 thousand tons”, compares Snitcovski.

The trade war between China and the United States, which began in 2018, and the fact that the Chinese are once again buying more cotton, after a period of preferentially consuming their own stocks, have opened a large window of opportunities for Brazilian cotton. “We are increasing our share in this market in relation to the United States, which was the leader as the main supplier. But this increase is also due to quality, sustainability, and, above all, shipping capacity that has been exceeding expectations”, says the president. In 2018, Brazil exported 436,5 thousand tons of feathers to China. “Now, from July to October 2019, we have already shipped 155 thousand tons. Our participation in the amount of cotton they buy went from 10% to 30%, and this is very significant”, he considers. China imports a total of 2 million tons of commodity, and, it is believed, has a deficit of three million tons to supply its industrial park. “From July 2019 to June 2020, 700 thousand tons of our cotton will go there”, says Snitcovski.

Also according to Anea, in the second half of 2019, Brazil should ship 980 thousand tons of feather, and, in the first six months of 2020, 900 thousand, totaling around two million tons of cotton harvested in the recently concluded harvest. From 2013 to 2018, Brazilian exports practically tripled, going from 489 thousand tons to 1,3 million tons.

Industry

According to the president of the Brazilian Association of the Textile and Clothing Industry (Abit), Fernando Pimentel, the national industry should close the year without major changes to the initial forecasts. “No zero to zero for the textile sector or a slight drop; discreet increase in clothing and growth in retail in the range of 1% to 1,5%. Therefore, a year in which we have had no joy as we will end at more or less the same size as we started,” he said.

For 2020, if nothing changes in the scenario, the industrial sector is expected to grow around 2% to 2,5%, with an increase in the range of 3,5% for retail. Regarding jobs, the sector generated, until October, more than 15 thousand formal jobs. Last year, in the same period, Abit found a drop of just over 2,5 formal jobs. According to the association, there is no way to guarantee that 2019 will end with a positive number in this aspect. “But, we can imagine that we are likely to close at zero or with a relatively small drop. For next year, if we grow by 2% to 2,5%, we estimate an increase of around 10 thousand formal jobs”, says Pimentel.

Regarding the consumption of raw materials, cotton continues to be the main input produced and processed in the country, but the growth of synthetic fibers continues to occur. “This happens due to prices, technology, processes, in short, a series of reasons. And that is why we will hold an event at ABIT on December 11th, to discuss this scenario of fibers in the clothing textile industry, as well as new possibilities arising from biodiversity, to address sustainability, and how Brazil will deal with this”, announces Pimentel. “Cotton is a noble feather, but, despite being the second largest raw material for consumption in the world, and, in Brazil, being the most relevant input in our industry, its market position has been eroded”, he concludes. .