Brazil: Record productivity cushions lower cotton acreage, tighter stocks support prices

• Brazil’s 2026/27 cotton area is forecast down 4.3% amid higher costs and price volatility
• Record yield of 2,003 kg/ha limits the production decline to 1.8%

Brazil’s cotton market is entering MY 2026/27 with a slightly tighter supply outlook despite record productivity. According to the latest USDA Post Brasilia assessment, harvested area is forecast at 2 million hectares, down 4.3% from 2.09 million hectares in the previous season. Higher interest rates, elevated input costs, price volatility and delays in soybean harvesting have encouraged some producers to shift acreage towards second-crop corn.

Record productivity limits production decline

Improved productivity is expected to offset much of the acreage reduction. Brazil’s yield is forecast at a record 2,003 kg/ha, lifting production to 18.4 million bales, or 4 million metric tons, only 1.8% below the previous season’s 18.7 million bales. However, heavy rainfall in Minas Gerais affected fiber quality in some areas, while generally favorable conditions in Mato Grosso and Bahia supported crop development.

Brazil’s export performance remains a key market factor. Exports reached 15.4 million bales in MY 2025/26, up 19% year on year. China accounted for nearly 23% of shipments, while India was also a major destination, with Indian imports of Brazilian cotton more than doubling from the previous season. Brazil’s exports are forecast at 15.5 million bales in MY 2026/27.

Implications for India

For India, stronger Brazilian export availability could increase competition for international buyers, particularly in Asian markets. At the same time, Brazil’s rising shipments to India provide Indian mills with an additional sourcing option when domestic cotton prices or quality availability become less competitive. The tighter Brazilian stock position, however, could limit downside pressure on global prices.

Brazilian ending stocks are forecast to decline 13.7% to 3.1 million bales, while the stock-to-use ratio falls to 16.45%. With cotton prices averaging 76.25 cents/lb in Brazil during 2026 and reaching 87.33 cents/lb in May, the tighter balance could provide near-term price support.