Brazil's Cotton Production: Progress, Prospects and Probems

In recent years, Brazil has emerged as one of the world’s leading cotton producers and traders. Brazil’s recent WTO case against the United States underscores the role of South America’s largest economy in global cotton industry. This paper seeks to identify and describe sources of cotton output expansion in Brazil. Among several factors contributing to the surge in cotton production in Brazil are; geographic shifts, technological advances, macroeconomic reforms and physical infrastructure development.

 

With rising population and economic development in traditional cotton growing southern coasts, Brazil began to look northward. At the heart of northern Brazil, was a sprawling virgin cerrados savannah which hitherto this time was ruled unfit for crop production. But with advances in soil science, the cerrado savannah became a source of high yield and ample supply of acreage for cotton production. But large cotton area with technological progress in agricultural alone were not sufficient to sustain increases in cotton production in the cerrados.

 

Following long episodes of macroeconomic problems, Brazilian authorities embarked on macroeconomic reforms which eventually stabilized the domestic currency, reduced and kept inflation under control, liberalized trade, attracted foreign direct investments and created incentives to domestic cotton growers. At the same time, painful attempts made to improve physical infrastructure all contributed in putting Brazil among the world leading producers of cotton.

 

I take a chronically approach, heavily relying on graphics to identify and describe factors that explain rising cotton production in Brazil, the prospects that the country hold as a major cotton producer, and the challenges that continue to hinder the country from realizing its full potential as a cotton grower.