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Porto Alegre, April 25, 2022 – The current global situation has led to a significant increase in the prices of essential raw materials for the production of Brazilian cotton for the new harvest. The impact is felt by producers in the significant increase in production costs, which requires more capital to finance the harvest and increases the risk of the activity.
Fertilizers were the inputs with the biggest accumulated increase in the last 12 months, exceeding 100% of increase with the increase in international prices and the exchange rate for imports. Potassium chloride (KCL), for example, which was purchased by producers at the beginning of 2021 for around R$ 1,800/ton, surpassed R$ 5,000/ton at the beginning of 2022, an increase of 182% in 12 months; urea, an important source of nitrogen, accumulated a high of 144%; and monoammonium phosphate (MAP) 110%.
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According to the production cost survey, fertilizers represent, on average, 17% of the effective operating cost of the cotton product.
Agricultural pesticides also registered a significant increase. The interruption in the functioning of Chinese industries and logistical problems have led to a decrease in available supply and increased prices for producers. On average, according to a survey by Abrapa, pesticides used in cotton rose 18%.
Herbicides saw a greater increase, particularly glyphosate, which surpassed a 100% increase in prices in the last 12 months. Mechanical operations are more expensive with the increase in fuel prices.
According to the ANP price survey, diesel oil is sold, on average, at R$ 6.43 per liter in Bahia and R$ 6.03 per liter in the state of Mato Grosso, an accumulated increase of 51% and 35% respectively . In this context, the average production cost of Brazilian cotton is estimated at R$ 18,323 per hectare for the 21/22 harvest. Increase of 24% in relation to the current harvest. The information is from Abrapa.
By: Rodrigo Ramos l Crops & Market
