Brazilian cotton: delayed harvest but smooth sales progress

As of the week ending August 9, Brazil's total cotton harvesting progress (accounting for 98% of the crop) stood at 39%, up 9.3 percentage points from the previous week but 16.3 percentage points slower than the same period last year. The year-on-year lag in Brazil's cotton harvesting progress has widened. Among the regions, Mato Grosso has completed 31.7% of its harvest, which was significantly below the five-year average. Mato Grosso is Brazil's largest cotton-growing state, accounting for 73% of the total cotton planting area of 2.0857 million hectares in the 2024/25 season. Its delayed harvesting has thus severely dragged down the overall progress of Brazil's cotton harvest.

The main reasons for the delayed harvesting progress are caused by the delayed harvest of soybeans during the cotton planting stage, and excessive precipitation during the harvesting stage. In January, during the planting stage, excessive rainfall in Mato Grosso delayed the harvest of soybeans and rapeseed, thereby affecting the sowing of the cotton crops. According to data from the Institute of Agricultural Economics of Mato Grosso, the area of the first crop of cotton in the 2024/25 season is 297,000 hectares, and that of the second crop is 1.226 million hectares, so the planting progress was lagging at that time. However, in May and June, affected by heavy rainfall and low temperatures, the harvesting of the first crop was hindered, and there was a certain loss in quality (risk of color grade downgrading). Nevertheless, with the improvement of the weather, the second crop of cotton, especially the late-sown cotton, is growing well, and it is expected that the color grade will not be affected by the previous rainfall.

Brazil's cotton exports are mostly based on forward contracts, with sales progress typically advancing well ahead of time. As of August 2025, the sales progress of the current 2024/25 season cotton in Mato Grosso stood at 66.15%, which was below the average level. However, the sales progress of the next 2025/26 season cotton has reached 22.57%, showing a relatively good performance.

In summary, Brazil's 2024/25 cotton crop faces disruptions in sowing and harvesting schedules due to excessive rainfall. However, only a portion of the first crop may have color grade issues caused by the rain, so overall sales performance has been good. That said, the continued weakness in Brazil's domestic cotton prices in June and July may have had some impact on farmers' harvesting progress. Nevertheless, Conab maintains its production forecast in August, so it is expected that the final arrival of Brazil's cotton on the market will only be delayed rather than reduced. This is because farmers need to sell their crops to recover funds for loan repayments.

In addition, according to agrometeorological reports, most parts of Mato Grosso receive less rainfall in July, which is beneficial for the harvesting of the second cotton crop. Looking ahead, from August to October, local temperatures will rise and precipitation will continue to decrease, creating more favorable weather conditions for cotton harvesting.