Farmers bet more heavily on cotton in Brazil's newest farming region
Refiling to fix typographical error in headline
By Marcelo Teixeira
LUIS EDUARDO MAGALHAES, Brazil, Nov 25 (Reuters) -Farmers in Brazil's most recent agricultural expansion region are planting more cotton and less corn in the new crop, after a successful previous season that saw Brazil surpass the United States to become the world's largest exporter of the fiber.
Cotton growing continues to make inroads in the sprawling farms around Luis Eduardo Magalhaes in the western part of Bahia state, where the "cerradp" (savannah) climate predominates. The well-defined wet and dry periods have made the region a natural expansion place for cotton growing.
"We plan to plant 25% more cotton this year," said Moises Schmidt, a partner at Agricola Schmidt, an agricultural group that cultivates around 35,000 hectares (86,490 acres) of farmland in Bahia, one of the states forming the new frontier known as Matopiba (Maranhao, Tocantins, Piaui and Bahia).
The movement in Bahia is a sign that Brazil will likely increase its share of the global cotton trade, the latest positive mark in a story that saw the country lead exports in soybeans and corn in recent years. Brazil is also the largest exporter of coffee and sugar.
Bahia is Brazil's second largest cotton producing state, only behind grains king Mato Grosso. Large circular bales of cotton wrapped in colorful plastic covers can be seen piled up in farms and at storage areas of co-ops and cotton processors in the region, waiting to be shipped abroad.
Agricultural consultancy Veeries projects that Bahia cotton area will grow by 9.5% in the new crop that is being planted to a record 379,000 hectares (936,530 acres).
In the case of Agricola Schmidt, it is cutting soy area to give room for more cotton.
"China's soy demand has kind of stabilized, it seems to have reached a peak, so cotton looks more attractive," said Schmidt, referring to the country that over the last decade was the main driver of Brazil's soy production jump. China buys around 70% of all soy exported by Brazil.
Veeries, however, sees soy area in the state little changed in the new crop. The one paying the price for cotton's expansion is corn (first crop), which is seen falling 9.2% to 363,000 hectares (896,990 acres), the smallest area in six years.
"Considering expected profit margins, cotton will give better returns than soy, and much more than summer corn," said Fabio Meneghin, lead analyst and partner at Veeries.
Looking at the whole country, cotton area is seen growing 7.9% to 2.15 million hectares (5.31 million acres), according to consultancy Safras & Mercado, which projects production at 3.89 million tones of cotton lint, 5.6% more.
Reporting by Marcelo Teixeira; editing by Jonathan Oatis
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