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Recent research indicates that Brazil is likely to become one of the world's leading exporters of cotton.
According to a forecast from the Center for Advanced Studies on Applied Economics (CEPEA), Brazil may surpass the United States to become the world's second-largest exporter due to the expected increase in cotton output for the 2023–24 season.
The data released by the United States Department of Agriculture (USDA) on September 12 indicates that, in comparison to the August forecast, global cotton production is expected to decline by 1.5 percent for the 2023–24 season and by a more notable 5.3 percent when compared to the 2022–23 season, totaling 24.471 million tons.
However, according to CEPEA's most recent biweekly report on the Brazilian cotton market, production declines of 2 percent and 6.1 percent, respectively, are anticipated in both India and the United States.
With the exception of Brazil, the United States Department of Agriculture (USDA) has reduced its export projections for all of the top exporting countries of cotton.
Brazil's exports are expected to soar by 4.9 percent between August 2023 and July 2024, hitting 2.57 million tons in total. For the 2023–24 season, the United States is expected to have 3.32 million tons of exportable surplus—its lowest level since the 2015–16 season.
In Brazil, the difference between consumption and output of cotton is expected to close in comparison to the 2022–2023 season.
But with a projected 5.86 million tons of exportable surplus, the nation is predicted to record its largest export surplus ever.
Key companies in the Brazilian domestic market have prioritized meeting their obligations to both domestic and foreign buyers over entering into new contracts due to rising freight costs and logistical difficulties. Notwithstanding worries about weak retail sector consumption, a little uptick in sales along the textile supply chain has helped liquidity.
The cotton CEPEA/ESALQ Index saw a 0.65 percent increase from August 31 to September 29. It ended the month at BRL 4.0738 per pound.
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