Planting of a record 2004/05 (September/August) Brazilian cotton crop now looks doubtful due to a world surplus and falling prices, cotton analysts said on Friday.
They said that the situation had changed significantly since April when improved world prices, buoyant foreign demand and Brazil's win over US cotton subsidies at the World Trade Organisation (WTO) made Brazilian growers euphoric.
"Prices are now not so attractive and there's less demand, but growers have until September to change their mind if there's a problem with the Northern Hemisphere crop," said Djalma Fernandes de Aquino, cotton analyst at the government's crop supply agency Confab.
Domestic prices have fallen 31 percent since April and international prices by 23 percent since March, he noted. Confab technicians are due to carry out a field survey in October in preparation for an initial 2004/05 official crop forecast later in the month.
Brazilian 2003/04 cotton production jumped 48.1 percent to 1.25 million tonnes in 2003/04 (Sept/Aug) following a 45.3 percent rise in plantings to 1.07 million hectares, Confab said.
In May, the USDA forecast that Brazil would produce a record 1.5 million tonne of cotton lint in 2004/05, of which 500,000 tonnes would be for export, from an area of 1.25 million hectares.
Independent cotton analysts disagreed over whether Brazilian cotton planting would increase next year.
Miguel Biennia at Safaris e Merced in Paranoia state said he expected Brazil's cotton area to slip 0.04 percent to 1.037 million hectares, from 1.04 million hectares in 2003/04.
"Cotton planting would fall more sharply but other commodity prices are not very attractive either and many producers are committed to cotton," Biennia said, noting heavy investments in cotton machinery and equipment.
"Cotton planting will increase in west Bahia whatever happens because farmers have spent a lot on it," he added. Biennia saw Brazilian cotton output sliding to 1.19 million tonnes in 2004/05, from 1.20 million tonnes this season.
But Fabio Monaghan, analyst at Agroconsult in Santa Catalina State, said he still expected the cotton area to rise by 15.6 percent to 1.28 million hectares in 2004/05. "The increased area will be mainly in western Bahia," he said, noting that farmers switched to cotton after soy crop losses due to drought and Asian soy rust disease.
Cotton planting in western Bahia is seen rising 24 percent to 250,000 hectares in 2004/05. Brazilian output is seen rising by 15.3 percent to 1.5 million tonnes next season while exports are seen climbing to 700,000 tonnes in calendar 2005, from 450,000 tonnes in 2004 and 175,000 tonnes in 2003.
"A lot depends on logistics and adequate supply of air conditioned containers," he said, noting a shortage due to strong Chinese demand for iron ore, soy and other commodities.
Brazil is set to become a regular rice exporter with around 100,000 tonnes of rice in 2004, rising to 500,000 tonnes annually from next year, the government's crop supply agency Confab said on Friday.
For the first time in 25 years, Brazil is expected this year to produce a small rice surplus with output of 12.7 million tonnes and domestic demand of 12.6 million tonnes. "There's no doubt that Brazil could become a regular rice exporter, albeit a small one," Paulo Morosely, rice analyst at the government's crop supply agency Confab, told Reuters.