Brazil on track to replace US as world's top cotton exporter

Affected by extreme weather, U.S. cotton production and quality are expected to decline this year. Brazil may surpass the United States to become the largest cotton exporter.

 

CNBC Jiang Yu: This year, the two largest cotton-growing states in the United States, Texas and Georgia, have experienced extreme weather.

 

This year, Texas, which accounts for 40% of U.S. cotton production, experienced the second-hottest summer on record, with average temperatures exceeding 85 degrees Fahrenheit (about 29 degrees Celsius), and heat waves occurred from time to time during this period. The state's cotton crop rated good to excellent has dropped 23 percentage points since early July, with just 11% now rated good to excellent since records began, according to the USDA. lowest level.

In Georgia, the second largest cotton-growing state, which accounts for 15% of the country's output, the state's rainfall in August was 55% higher than the average of the past 10 years due to the recent impact of Hurricane Idalia. %. Heavy rainfall hitting already open cotton bolls can cause damage to the plant fibers and lead to loss of cotton wadding. Just 58% of the state's cotton is currently rated good to excellent, which is the second-lowest level during this time in the past five years.

 

The analysis pointed out that due to the impact of extreme weather, the production and quality of US cotton are expected to decline this year. At the same time, British trader Plexus Cotton pointed out that the quality of Brazilian cotton this year is very good.

 

The United States is the third largest cotton producer and the largest exporter in the world. The United States and Brazil together account for more than half of global cotton exports. According to the U.S. Department of Agriculture, Brazilian cotton production and exports have been catching up in recent years.

 

In terms of production, from 2023 to 2024, the United States is expected to produce 14 million bales of cotton, and Brazil is expected to produce 13.3 million bales of cotton. The difference in output between the two is less than 1 million bales. In terms of exports, the United States is expected to export 12.5 million bales of cotton in 2023-2024, and Brazil is expected to export 11.25 million bales. Bloomberg reports that Brazil is expected to continue to increase cotton production and exports in the next few years.

 

The analysis also noted that the USDA may lower its current export forecast due to poor crop quality. Plexus Cotton said that if the condition of the US cotton crop deteriorates further, Brazil may easily surpass the United States. They also predict that Brazil may become the largest exporter of cotton in the current marketing season.