Brasília, April 29, 2004 (Agência Brasil) - The Brazilian Association of Cotton Growers(Abrapa) expects that the Brazilian government's estimate for a record-breaking 1.2 million ton crop this year will be confirmed. "The country had to produce more to supply the domestic market and the foreign market, which has been growing. Brazil's average annual domestic consumption is 800 thousand tons. This year the excess production will satisfy international export contracts," affirms Abrapa councillor, João Pessa. The crop last year amounted to 850 thousand tons.

According to Pessa, if the United States eliminated its cotton subsidies, Brazil could double its production in one or two years to supply the market that would open up. He admits, however, that this will not be easy. "Brazil is the only country with the potential to take over a good part of the market that is currently dominated by subsidized American cotton. The response of the United States is that they will continue to defend their position in the World Trade Organization (WTO). But we took a big step by obtaining an acknowledgement within the scope of the WTO that the subsidies make developing countries unable to compete on the international market," he said.

The United States is currently the world's largest cotton exporter. China, even though it is the world's biggest producer, imports between 800 thousand and one million tons of the product, annually. Together with other Asian nations, it is the chief purchaser of Brazilian cotton. Brazil's second most important market is the European Union.

According to Pessa, the growth in this year's cotton crop will have positive consequences for Brazil. Cotton exports equivalent to 450 thousand tons will inject US$ 1 billion into the country's trade balance. The Abrapa representative affirms that the bigger cotton crop also creates more jobs and reduces the domestic price of the product.

For its part, the current Brazilian soybean crop should attain 52.609 million tons, 2.19% more than in 2003 (51.482 million tons), according to the March estimate for the 2004 harvest, announced today by the Brazilian Institute of Geography and Statistics (IBGE).

Compared with the first estimate for 2004, released in January, there is a loss of approximately 7 million tons, in consequence of adverse climatic conditions in the principal centers of production, according to the IBGE. "There was a dearth of rain in the states of Rio Grande do Sul, Paraná, and Mato Grosso do Sul, and an excess in Mato Grosso and Goiás. In this last state there was also a severe attack of Asiatic rust, a fungus disease very damaging to soybean plantations," the Institute's note explains.

Translator: David Silberstein