September 18, 2014

After low prices cut acres sown to 1 million acres, the U.S. Department of Agriculture bureau in Brasilia set its forecast for Brazil’s cotton exports at 2.2 million bales for 2014/15, down 50% from two seasons before.  This differs widely from the official forecast from the U.S. Department of Agriculture (USDA) of exports for 3.7 million bales based on the belief that production will hold at 7.3 million tons, however, production fell 12% to 6.9 million tons.  Cotton prices in Brazil have fallen below the government-guaranteed floor price to US$0.7212 per pound prompting the government to allocate US$134 million to support its cotton farmers leading many to believe that farmers will be exiting the cotton industry.  Australia’s cotton production for 2014/15 is forecast to fall by 35% to a five-year low of 580,000 tons according to the country’s commodity bureau, Abares.  However, because of largest stockpiles, Australia is expected to ship 821,000 tons, making it the world’s third largest cotton exporting country behind the U.S. and India.

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