São Paulo – In 2009, the family of farmer Nicanor Carvalho, 95, almost gave up planting cotton in Leme, 188 kilometres away from the capital of the state of São Paulo. According to the farmer’s granddaughter, agronomist Cristiane Carvalho, the family came close to ceasing to grow the commodity. The planted area was reduced to make room for maize and soy.
But since the last crop, the family has gone back to investing in cotton. In 2011, the planted area at Nicanor’s farm covers 150 hectares and may reach 250 next year, if the demand remains strong and the inventories, low.
Nicanor’s family was not the only one to consider other cultures as income sources. Other growers have leased farms, sold machines and now want to go back to the old product. According to the president of the São Paulo Cotton Growers Association (Appa), Ronaldo Spirlandelli, the state of São Paulo has even more reasons to attract farmers.
Spirlandelli highlights that the state was the leading producer of cotton in Brazil in the 1960s, but suffered with the boll weevil pest and lost farmers. According to the Appa, in the 2000-2001 crop the state had 63,000 hectares of planted area for cotton. In 2009-2010, the planted area reached its lowest level ever, at 4,800 hectares, but has already begun to recover: in the 2010-2011 period the planted area for cotton should reach 16,200 hectares, the same as in 2007-2008. "Presently, even sugarcane areas are giving way to cotton due to the profitability,’ says Ronaldo.
The forecast is that the next crop should exceed 20,000 hectares of planted area in the state of São Paulo, especially in the region of the state that has the most cotton crops: Paranapanema, Leme, Holambra, Ituverava, Martinópolis and Votuporanga. The planted area in the state, however, is small when compared with the 671,175 hectares of cotton planted in Mato Grosso, the leading producing state in the country. Bahia is another top producer, with a planted area of around 360,000 hectares.
The increase in planted area in São Paulo is a reflection of pest control, but especially due to the fact that Brazil and the world need cotton and prices are on the rise. São Paulo is not the only one to benefit from rising production. The Brazilian Association of Cotton Producers (Abrapa) expects an increase of 10% to 20% in planted area over the next three years in Brazil.
As of June 28th, 1996, one pound weight of cotton sold for 80.1 cents of dollar. On the 29th of March this year, the same amount of cotton sold for 236.4 cents of dollar, according to data from the Cepea/Esalq, a research centre connected to the University of São Paulo (USP). The same survey shows that the commodity has had ups and downs on the international market. However, according to the Cepea, the hike became sharper starting on September 25th, 2009, when cotton was selling for 63.38 cents of dollar.
To the Cepea, the causes for the upward price trend are low global inventories, fast growth of demand and a decline in planted area in the 2009-2010 crop. In spite of the increase expected in the coming crop and of the fact that the supply is larger than the demand, inventories will remain low.
Exports
According to Abrapa figures, in the first two months of 2011 Brazil exported 32,300 tonnes, a 47.75% decline over the 61,813 tonnes of the product that were shipped abroad in the same period of 2010. The last crop was not good for the country. Growers called for tax exemption on imports of 175,000 tonnes of cotton (which will remain in effect until May 31st) in order to meet the domestic demand.
Among the Arab countries, the leading buyer of Brazilian cotton was Morocco. The country imported 543 tonnes, an increase of 54.7% over the 351 tonnes sold in January and February last year.
*Translated by Gabriel Pomerancblum
