U.S. Reaches Deal With Brazil Ending Cotton Dispute

October 1, 2014Brazil Institute Leave a comment

Alan Bjerga – Bloomberg News, 09/30/2014

The U.S. and Brazil reached a $300 million agreement to resolve a dispute over cotton subsidies that has bedeviled the two nations for more than a decade.

The accord signed today in Washington involves a one-time U.S. payment to the Brazil Cotton Institute in return for that nation dropping all claims against the U.S., the U.S. Trade Representative said in a statement. Brazil will also not pursue any new World Trade Organization cotton claims while a five-year farm bill Congress passed in February is in effect.

“Today’s agreement brings to a close a matter which put hundreds of millions of dollars in U.S. exports at risk,” U.S. Trade Representative Michael Froman said in a statement with Agriculture Secretary Tom Vilsack. “The United States and Brazil look forward to building on this significant progress in our bilateral economic relationship.”

Soybean Slide Prompts Top Brazilian Grower to Scale Back

July 16, 2014Brazil Institute Leave a comment

Gerson Freitas, Jr. – Bloomberg, 7/15/2014

SLC Agricola SA (SLCE3), Brazil’s biggest publicly traded cotton and soybean grower, is scaling back plans to double its growing areas after commodity prices plunged.

SLC, which has tripled its land since going public in 2007, is scrapping a plan announced in 2011 to expand to 700,000 hectares (1.7 million acres) by 2020 from about 344,000 now, Chief Executive Officer Aurelio Pavinato said in an interview. Instead, the Porto Alegre-based company wants to boost cash flow by making current farms more efficient, he said.

Soybeans and corn are trading at four-year lows and cotton is posting the second-biggest slide among agricultural commodities worldwide this year, making farmland purchases in parts of Brazil that are far from ports less desirable. SLC is now focusing on areas that need fewer investments through leasing and joint ventures as well as on cutting costs.

Analysis: Brazil brings farming muscle to corn and cotton

June 22, 2011Brazil Institute 1 Comment

Reese Ewing – Reuters, 06/22/2011

After transforming global agriculture by quintupling their soybean production since 1980, Brazilian farmers are now on the brink of crop breakthroughs in cotton and corn, long dominated by growers in America.

Helped by high futures prices and a sustained local agricultural boom, cotton and corn acreage is spreading fast despite being twice as capital intensive as soybean crops.

The number of ship berths dedicated to these two crops at Brazil’s congested ports is growing, statistics show. And while soy will continue to reign on Brazil’s vast savanna, analysts say that even a modest shift toward corn and cotton could make a difference in global markets due to Brazil’s sheer size.

WTO authorizes Brazil sanctions over U.S. cotton

November 19, 2009November 30, 2009Brazil Institute Leave a comment

Jonathan Lynn-Reuters, 11/19/09

The World Trade Organization authorized Brazil Thursday to impose trade sanctions on the United States over its support for cotton, as Brazil ratcheted up pressure on Washington over the illegal subsidies.

But Brazil is not yet ready to levy the sanctions, as it considers which U.S. products to target and analyses U.S. data on subsidies which will determine the size of retaliation.

The formal move at the WTO’s dispute settlement body (DSB) brought Brazil one step closer to retaliating against the United States, the world’s biggest cotton exporter, in the highly sensitive 9-year-old row.

The reduction of rich countries’ cotton subsidies is seen by developing countries as the litmus test of efforts to reform the world trading system in the WTO’s Doha round, with African producers in particular demanding radical change.