Brazil's Cotton Industry: Economic Reforms and Development

Brazil is one of the world’s leading cotton producers and an important competitor of the United States in cotton trade in markets in Asia and Europe.  This situation has come about as a result of trade liberalization and a structural transformation of the Brazilian economy and its cotton sector.  With liberalization has come an increase in cotton area the emergence of new cotton producing regions, using advanced technologies and benefiting from targeted government support.  Brazil’s access to additional agricultural land and recent favorable cotton prices suggest the country’s cotton production could rise even more than previously expected, and make the country an even more influential player in the world cotton market. This analysis examines the growth and development of the cotton industry in Brazil, starting at the most general level with an overview of Brazil’s cotton today, and progressing toward more specific discussion of the factors behind Brazil’s rapid gains in acreage and yields, and what this has meant for cotton production, trade, and consumption.  This paper takes into consideration the role of Brazil’s economic reforms and evolving agricultural policies that over time have sought to balance producers and consumer interests, have created market cycles, and have contributed to the ongoing structural transformation of the Brazilian cotton sector.