Brazil's cotton production and exports in the 2006/07 crop year are seen growing, after contracting this year, due to reduced planting by the soy sector, which is in crisis, cotton exporters said.
The National Cotton Exporters Association forecast the 2006/07 cotton crop at 1.225 million tonnes, up from 990,000 tonnes this season. Exports in 2007 could reach 390,000 tonnes, up from expected shipments of 345,000 tonnes this year.
"The perspective for increased cotton output is based principally on the fall in soybean planting," said Marco Antonio Aluisio, director of the cotton exporters association, known as Anea.
Many Brazilian cotton producers also plant soybeans. The area planted to soybeans fell about 5 percent from last year and is forecast to fall anywhere from another 5 percent to 15 percent next year, unless conditions improve significantly for the soy sector.
The weak dollar and increased production costs have hurt the soybean and grain sectors, prompting the fall in planting. Many areas of production are now losing money because of high freight and fuel costs.
"With the problems in soy, today it is more viable to plant cotton than soy, despite the higher investment costs for cotton," Aluisio said.
Low cotton prices over the previous year trimmed producers' plans to plant the current crop in the second half of 2005. The agriculture ministry sees the current crop output at 1 million tonnes of cotton plume, down from 1.3 million in 2004/05.
The local market is expected to consume 900,000 tonnes of cotton.
Between the months of May and June, the majority of Brazil's current cotton crop will enter the market with the harvest of the main crops in Mato Grosso and Bahia states.
Anea's forecast was in line with the US Department of Agriculture's forecast Tuesday for the 2006/07 cotton crop at 1.2 million tonnes of plume.
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