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Brazil's Domestic Supply Shrinks, Cotton Prices Rise Sharply

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In recent years, due to the continuous devaluation of the Brazilian currency, the real against the dollar, stimulating the cotton-producing country of Brazil's cotton exports, and led to a sharp rise in retail prices of Brazilian cotton products in the short term. Some experts pointed out that in this year's Russia-Ukraine conflict under the spillover effect, Brazil's domestic cotton prices will continue to go up.

General reporter Tang Ye: Brazil is the world's fourth largest cotton producer. But in the past two years, the price of cotton in Brazil has increased by 150%, which directly led to the price of clothing in Brazil in June this year became the fastest increase in all kinds of commodities. Today we went to a cotton producer in central Brazil to find out the reasons behind this.

Located in Mato Grosso, Brazil's main cotton-producing region, this cotton grower and processor owns 950 hectares of land in the region. The cotton harvest season is now upon us and this year's approximate lint production is around 4.3 million kilograms, with the harvest at its lowest point in recent years.

Carlos Menegatti, marketing manager of a cotton growing and processing company: We have been growing cotton locally for over 20 years and the way we produce cotton has changed considerably over the years, especially since this year when the cost of fertiliser, pesticides and agricultural machinery has increased significantly, which has increased the cost of cotton production to the extent that current export earnings are not enough to cover our production costs next year.

Brazil is the world's fourth largest cotton producer after China, India and the USA, and the second largest cotton exporter. In recent years, the continuous devaluation of the Brazilian currency, the Real, against the US dollar has stimulated an increase in Brazilian cotton exports, which are now close to 70% of the country's annual production.

 


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