Global Perspective: Brazil'S Domestic Supply Decreases And Cotton Prices Rise Sharply

In recent years, due to the continuous depreciation of Brazilian currency real against the US dollar, it has stimulated the cotton export volume of Brazil, which is a major cotton producing country, and led to a sharp rise in the retail price of Brazilian cotton products in the short term. Some experts pointed out that under the spillover effect of the conflict between Russia and Ukraine this year, Brazil's domestic cotton prices will continue to rise.

Head station reporter Tang Ye: Brazil is the fourth largest cotton producer in the world. But in the past two years, cotton prices in Brazil have risen by 150%, which directly led to the fastest increase in clothing prices among all kinds of commodities in June this year. Today we come to a cotton producer in Central Brazil to see the reasons behind it.

Located in Mato Grosso, Brazil's main cotton producing region, the cotton growing and processing enterprise owns 950 hectares of land there. At present, the cotton harvest season has come. This year's lint yield is about 4.3 million kg, and the harvest is in the low ebb period in recent years.

Carlos Menegatti, marketing manager of a cotton planting and processing enterprise: we have been planting cotton locally for more than 20 years. In recent years, great changes have taken place in the way of cotton production. Especially since this year, the cost of chemical fertilizer, pesticide and agricultural machinery has increased greatly, which has increased the production cost of cotton, So that the current export earnings are not enough to cover our production costs next year.

Brazil is the fourth largest cotton producer and the second largest cotton exporter in the world after China, India and the United States. In recent years, due to the continuous depreciation of the Brazilian real against the US dollar, Brazil's cotton exports have been increasing. At present, cotton exports are close to 70% of the country's annual output.

Cara Benny, Professor of economics at the Vargas Foundation: Brazil's agricultural export market is broad, which has compressed the supply of cotton in the domestic market. After the resumption of production in Brazil, people's demand for clothing increased suddenly, which led to a shortage of products in the whole raw material market, which further pushed up the price.

Due to the high demand of high-end cotton market in Brazil, the demand for high-end cotton will continue to increase in the future.

Carla Benny, economics professor of the Vargas Foundation: it is worth noting that Russia and Ukraine are major exporters of grain and fertilizer. Both grain and fertilizer are related to the output, price and export of Brazil's agricultural products. Due to the current (Russian Ukrainian conflict) such uncertainties, Brazil is likely to have a trend in the future, even if the output is increased, it will be difficult to recover the domestic market cotton shortage and higher prices.