December 9, 2010

Brazil's cottonseed production to increase on soy delays

Cotton production in Brazil is to jump by 40% in 2010-11, more than previously expected, thanks to a knock-on effect from the dry start to the sowing season, which has cut expectations for soy production.

USDA officials in Brasilia lifted to a record 7.65 million bales their estimate for cotton output in Brazil, citing the impact of high prices and a difficult start to the soy sowing season in luring growers to the fibre.

In Mato Grosso alone, the top cotton-growing state, plantings of the fibre are estimated to have set a record above 600,000 hectares, more than half the national amount for seedings.

The extent of the rise in cotton output in the world's fifth biggest exporter of the crop is such that it is "expected to strain the supply of production inputs, harvest equipment and gins", the USDA officials said.

However, they also cut by 720,000 tonnes to 66.8 million tonnes their forecast for Brazil's soy crop, reflecting both the quantity and quality of the acres lost to cotton.

"The most fertile lands are being reserved for cotton production, thus slightly reducing yield potential for soy," the USDA said.

In addition, it cited the La Nina weather phenomenon, which is expected to continue to bring irregular precipitation throughout the growing season and result in low national yields.

The new harvest forecast represents a fall of nearly two million tonnes on the bumper 2009-10 soy crop in Brazil, the world's second largest producer of the oilseed, with shipments now expected to fall from last season's 30.5 million tonnes.