Brazil has become the world’s largest exporter of cotton, confirming its status as a decisive actor in the global exchange of agricultural commodities.
In the 2023/2024 cycle, Brazil sold 12.4 million bales of cotton to the international system. In the same period, the USA sold 11.8 million units and Australia became the third largest seller of the system, after placing 5.8 million bales.
The Brazilian harvest was obtained with a planted area of 1.87 million hectares in the 2023/2024 period, which means an increase of 13% compared to the previous period.
Cotton production in Brazil is a phenomenon of the last two decades: it is the period in which the agribusiness system, which is the productive engine that irreversibly transformed the Brazilian economy and which is highly intensive in technology and capital, emerged on a large scale.
Brazil’s economy is the largest in Latin America, with a GDP of US$1.6 trillion – the ninth largest in the world. The country is the largest global exporter of soybeans, meat, orange juice, sugar, coffee and now also cotton.
Brazilian agriculture has the lowest cotton production costs, as well as the best yields, in the global system, ahead of the USA.
Brazil’s cotton production reached 2 million tons per hectare in 2023, especially in the large agricultural state of Mato Grosso.
The dominance of Brazilian agriculture is based on its low production costs and exceptional yields. That is why its appearance on the world market causes a systematic and long-term drop in prices.
This is what the futures markets unequivocally reveal: ICE US COTTON fell to less than US$069 per pound (0.000454 ton) in July 2024, half of the May 2022 peak.
There is a fundamental transformation in global cotton demand, driven by changing clothing habits around the world. The tendency is to reject the use of polyester and other chemical products, and use nature’s resources instead, especially cotton.
This trend also includes fashion from the great centers of global haute couture (Paris, New York, etc.).
This proves once again the veracity of Oscar Wilde’s statement that “snobbery is the friend of art”.
Brazil has the largest agricultural land reserves in the world, with more than 100 million hectares in the Cerrado. Therefore, sustained growth in cotton production can be expected over the next 10 to 15 years.
The trend in the USA is in the opposite direction because production costs are increasing, mainly due to the rise in fertilizer prices.
This causes farmers to increasingly lose competitiveness, which constitutes a true paradox in the agricultural sector with the highest level of productivity increase in the history of capitalism.
Argentina could once again be one of the major protagonists in the cotton business, as it was in the 1920s to 1940s, with its epicenter in the province of Chaco, and also in the provinces of Formosa and Salta.
These were years of prosperity in the interior of the Chaco, which attracted a large foreign immigration, starting with the “Russian-German” settlers, as well as the Mennonites, extraordinary and highly efficient producers, coming from different parts of Europe.
Every year, labor from east of Salta – the harvesters of the Chaco Salteño – flocked to the newly founded villages in the then national territory of Chaco.
This productive miracle could happen again, but now it is the new technological and competitive conditions established by Brazilian agribusiness that define the framework of the possible and the impossible in current agricultural production.
Meanwhile, the Chaco’s ecological conditions for cotton production, as well as the capacity and pioneering strength of the region’s foreigners, with its epicenter in Charata and Sáenz Peña, remain intact.
Some essential things are not lost and are part of the Argentine DNA.