Confidence in Brazilian cotton stands out in trading relations with Indonesia
Business and Markets |
Indonesian industries visited by Abrapa show preference for Brazilian fiber and are open to expand business with Brazilians
The “Sellers Mission”, organized by the Brazilian Association of Cotton Producers (Abrapa) and the National Association of Cotton Exporters (Anea), ended the stage in Indonesia with a positive balance. Satisfied with the product and price, the Indonesian industrialists project to expand the trade relations with the Brazilians.
For that to happen, Brazilian cotton farmers only need to keep investing in the improvement of quality indicators and in the traceability of the product. “Over the years, Brazilian cotton has improved a lot, reaching quality close to or even better than that of the United States”, confirmed Anupan Agrawal, CEO of Indorama Technology.
The company is a cotton, polyester and blended spinning mill, which has been using Brazilian cotton for ten years. Indorama was visited by the Brazilian delegation of producers and exporters between June 6th and 8th for the exchange of experiences that guides Abrapa’s initiative. The company is expanding its industry in Indonesia and opening a factory in Turkey to work only with cotton spinning.
Another positive point mentioned by Agrawal is the fact that Brazilian fiber is free of contamination. “In addition, the HVI data reported by Brazil is reliable. For about three years I have been receiving the list and sending it directly to the factory to make the blend, without retesting. It is a relationship of trust that has been built between the parties.
This trust helps explain the good cotton trade figures between Brazil and Indonesia. In 2021, Brazil exported 207 thousand tons of cotton to Indonesia, which is the sixth largest market for the Brazilian plume and the country with the second-best market share for the Brazilian plume (41%). In this commercial year (from August 2021 to April 2022), 133,200 tons of Brazilian fiber have already been shipped to Indonesian industries.
The sixth largest importer of cotton in the world (501,000 tons in the 2020/21 harvest), Indonesia is not expected to see its own production increase. “By January 2023, our cotton consumption is projected at 60,000 tons,” anticipates Anupan Agrawal.
The Asian Cotton Industry was another industry visited by Abrapa’s delegation. The factory has worked with 100% Brazilian cotton in its spinning mill since the beginning of its activities – importing from other countries only when shipments are not available. More than 80% of the production is destined for the Japanese market. “We have noticed the continuous improvement in the quality indexes, and we are fans of Brazilian cotton”, said Tomy Tjandradinata, one of the owners of the industry.
The other visit made by the Brazilians was to Kewalrama, which produces yarn for blinds, curtains, and products for industrial use, and is in Indonesia with two units.
The agenda was completed with a meeting at the Brazilian Embassy in Jakarta, with the Minister Counselor Daniel Ferreira and the Agricultural Attaché Bruno Breitenbach.
“The participation of the embassies in the promotion of Brazilian cotton has been amazing. It is important to show that cotton farmers operate mostly in family structures, but professionalized and highly technological”, Abrapa’s president, Júlio Busato, pondered.
Abrapa and Anea’s trade mission in Asia is part of the Cotton Brazil program, developed in partnership with the Brazilian Trade and Investment Promotion Agency (Apex-Brasil). The objective is to promote Brazilian cotton in the international market and develop markets, especially in Asia – a region that concentrates 99% of Brazilian exports.
“Currently, we are the world’s second largest cotton exporter, accounting for 23% of the market in the 2020/21 cycle. But we have a strong growth potential in the coming years. Furthermore, in these trade missions we realize how open the countries are to this”, Busato observed.
The president informs that one of the objectives of the initiative is the exchange of technical information so that producers can identify the needs of their clients and what kind of investments or adjustments are necessary for the expansion of foreign trade.
The “Sellers Mission” will also pass-through Thailand and Bangladesh. The three countries together represent 21% of the total shipped to Asia in the 2020/21 harvest, around 498.5 thousand tons of fiber. In the current cycle (from August/21 to April/22), they are responsible for 21% and for a shipped volume of 313 thousand tons of Brazilian cotton. The exchange is ongoing and continues until June 15.