Cotton growers in Brazil, the world’s fifth-largest exporter of the fiber, plan to increase output next year after prices surged and India said it will scale back shipments, the head of an industry group said.
Producers aim to boost output to 1.5 million metric tons in 2011, from 1.2 million tons this year, said Haroldo Cunha, head of the Brazilian Association of Cotton Producers, or Abrapa. Planting for the next harvest may rise to 1.1 million hectares (2.7 million acres) from 830,000 hectares this year, he said.
Cotton prices have soared 73 percent in the past year and reached a 15-year high of $1.064 on Sept. 28 after India, the world’s second-biggest exporter after the U.S., said it will limit exports to stem rising domestic prices. The delay in shipments from the Asian country may widen a supply deficit as world demand outpaces output, creating an opportunity for Brazil to boost exports, Cunha said.
“Brazil has good chances of winning markets unattended by India,” Cunha said yesterday in a telephone interview from Liverpool, where he attended a cotton industry seminar.
India will limit exports to 5.5 million bales of 170 kilograms (375 pounds) each in the season starting Oct. 1, and the cap will be reviewed in the middle of December, Farm Minister Sharad Pawar said on Sept. 28. Exports in the year that ended yesterday were estimated to be 8.3 million bales, according to the Cotton Advisory Board.
Cotton may stay above $1 a pound until the end of the first half of 2011, Cunha said.
Government Aid
Brazil’s government may consider increased financing for cotton growers to encourage them to raise output next year, said Celio Porto, secretary of international affairs at the Brazilian Agriculture Ministry.
“It can be an intelligent measure to increase credit limits for growers as a way to help them boost output,” Porto said in an interview yesterday in Brasilia. “I’ll look into this possibility.”
A four-month drought hurt the quality of the crop this year in Brazil, causing output to fall short of Abrapa’s estimate for 1.35 million tons, Cunha said.
The government on Sept. 14 temporarily eliminated a 10 percent tariff on cotton imports as domestic supplies fall short of demand after a four-month drought hurt the quality of crops. The tax will apply to imports of as much as 250,000 tons from October to May.
