BELO HORIZONTE*, Brazil — Global cotton prices are likely to remain elevated as production declines across several of the world’s biggest growers, strengthening Brazil’s position as the country prepares to expand planted area, according to agricultural consultancy Agroconsult.
The firm estimates combined cotton output from China, India, Brazil, the US, Pakistan and Australia at 26 million metric tons in the 2026/27 season, about 600,000 metric tons below consumption.
Brazil is moving in the opposite direction from much of the global market, increasing supply as other major producers cut output, André Pessôa, Agroconsult CEO, said Wednesday at a conference organized by the Brazilian Cotton Growers Association, known as Abrapa.
In the 2026/27 season, Mato Grosso is expected to produce 2.99 million metric tons of cotton lint, surpassing the US for the second consecutive year and coming in 7% above US output, according to Agroconsult.
The tighter global supply outlook, combined with higher oil prices, has helped reverse cotton’s price trajectory in recent months. Pessôa said the market had previously expected prices around 70 cents a pound, while futures are now trading near 85 cents.
Higher prices could weigh on demand, particularly in countries such as Bangladesh, where structural shortages of natural gas have affected supplies to households and businesses and could also constrain the textile industry, Pessôa said.
“Futures are reflecting a significant risk premium around all these uncertainties, and that premium should gradually fade as they clear,” he told reporters. “Overall, we think the market is pricing the cotton outlook appropriately.”
Higher Acreage
Current cotton prices have improved the economics for Brazilian growers even as production costs rise.
For second-crop cotton planted after soybeans in northern Mato Grosso, Agroconsult estimates 2026/27 production costs at about $2,840 per hectare (14.600 reais), or roughly $1,150 per acre, up from about $2,780 per hectare (14.300 reais) in 2025/26.
“In relative terms, we’re in a better position than we were last season,” Pessôa said.
The more favorable environment should encourage farmers to plant more cotton. Agroconsult expects Brazil’s cotton area to grow about 7% next season to 2.2 million hectares (5.4 million acres), returning to the level seen two seasons earlier.
Most of the expansion is expected in Mato Grosso, where acreage is forecast to rise 8.5% and again exceed 1.5 million hectares (3.7 million acres). Bahia is also expected to expand from a base of about 400,000 hectares (988,000 acres).
Credit availability remains an important constraint on that expansion, Pessôa said.
“Access to funding is still a very important issue when it comes to expanding acreage,” he said. “But we will certainly see cotton area grow again in Brazil this year.”
* The journalist traveled to Belo Horizonte at Bayer’s invitation.
This story was translated from the original Portuguese with the assistance of artificial intelligence and reviewed by The AgriBiz editorial staff.
