Brazil Cotton Growers Poised for Record Expansion Amid Global Supply Tightening

Brazil's cotton growers are poised to expand their acreage as global supply tightens. The country is wrapping up its largest harvest on record, and cotton prices have risen by more than 8% in New York since July, nearly doubling margins for some growers in Mato Grosso.

According to Francisco Queiroz, an analyst at Itaú BBA's agribusiness consultancy, margins for second-crop cotton growers in Mato Grosso have climbed to about 40% from 25-26% in April. This is below the unusually high 70% margins seen in the 2019/20 and 2020/21 seasons but more consistent with historical averages.

With improving profitability and attractive returns from a soybean-cotton rotation, Itaú BBA forecasts at least an 11% increase in Brazil's cotton acreage in the 2026/27 season to about 2.3 million hectares (5.7 million acres), a record exceeding the 2.2 million hectares planted in 2024/25.

StoneX also expects acreage to increase, but by a more modest 5%. However, BrasilAgro plans to reduce its acreage next season as part of an operational adjustment aimed at improving returns, shifting from cotton to lower-cost corn to ease cash-flow pressure.