The cotton yield in Brazil’s top growing state will fall to its lowest in six years thanks to damage from drought and frost, confronting farmers with the possibility of both output and prices below what they had hoped for.
Imea downgraded by 0.153 tonnes per hectare (112 pounds per acre) to 4.025 tonnes per hectare its forecast for the Mato Grosso cotton yield in 2021-22, citing weather setbacks.
“Drought that affected Mato Grosso in May and April, mainly in the western region of the state, together with the spots of frost observed in some crops, contributed to a lower yield,” the research institute said.
The revision took the yield estimate below last year’s 4.17 tonnes-per-hectare result to the lowest since 2015-16, and further beneath the trailing five-year average result of 4.29 tonnes per hectare.
The downgrade was reflected in a cut of more than 70,000 tonnes (322,000 bales) to the forecast for Mato Grosso cotton output for the 2021-22 harvest, which is in its early stages, reducing the total to 1.95m bales.
That would still represent expansion of some 183,000 tonnes year on year, a reflection of increased sowings, encouraged by high prices, but also by the timely soybean harvest.
Cotton is planted in the main in Mato Grosso as a safrinha crop, seeded on land vacated by the soybean crop early in the calendar year.
With cotton a relatively slow-developing crop, and having an early close to its seeding window, significant area is only possible in years with a rapid soybean harvest.
‘There was no late rain’
The revision follows a downgrade last week by Abrapa, the cotton producers’ industry group, to 2.6m tonnes in its forecast for the overall Brazilian cotton crop.
“We were doing very well, but unfortunately there was no late rain for our cotton,” said Júlio Cézar Busato, the Abrapa president.
“We were anticipating 2.8m tonnes, with the possibility of reaching 2.9m tonnes, but the rain did not come.”
‘Price dropped steeply’
It also comes amid a retreat in cotton prices in Brazil, as on international markets, with New York futures suffering in June their worst month in more than a decade.
Cotton, as an industrial commodity, is particularly sensitive to the broader economic concerns which have also hit stockmarkets, with prices also weighed by improved US growing weather and disappointing US export data.
Prices in Mato Grosso have, since hitting a record high in May, fallen by 24% to a seven-month low, according to Imea.
Separately, Cepea reported that Brazilian prices had “dropped steeply” to stand at R$626.12 (117.56 cents) a pound on Monday, also a seven-month low, and down 23% from mid-May’s record high.
“With the arrival of the new crop and cash flow needs, some Brazilian sellers were more flexible in terms of prices… accepting purchasers’ lower bids,” Cepea said.
“These sellers were also aware of the weaker values abroad.”