In just three harvests, the flow of cotton produced in Western Bahia reached 14.5 times the volume. Plume exports through Tecon Salvador, the container terminal at the Port of Salvador, jumped from a modest 545 containers in the 2022/23 harvest to an impressive 7,914 containers in the 2025/2026 harvest — an exponential growth of more than 1,350%. Bangladesh (with 2,315 containers) and China (with 1,240) lead the race for the Bahian product, which supplies the most demanding textile parks on the planet.
The numbers gain support in the field. In the 2025/2026 harvest, the state cultivated 417.9 thousand hectares of the crop, consolidating itself as the second largest cotton producer in Brazil, behind only Mato Grosso. The advance helps the country to pave its leadership position in the global supply of fiber.
However, success also brings great challenges: the greater the volume exported, the more the financial survival of the business depends on controlling production costs at the tip of the pen.
Sérgio Pitt, a cotton producer in the region, summarizes the strategic knot that the sector is trying to untie. Although soil management, biotechnology and the distributed climate of Western Bahia — with rain during growth and severe drought during boll opening — guarantee successive productivity records, final profitability has been eroded before it even reaches the farm’s cash flow.
“Costs have been eating into productivity gains. What impacts the most today are interest rates, taxes and fertilizers. Logistics also weighed in, with the increase in fuel prices, freight rose along with it. We have one of the best production costs in the world, but we don’t have incentives like the Americans, Indians and Chinese, who have clear price equalization policies”, he told the reporter.
In the last two years, the greatest pressure has been concentrated on the fertilizer line, especially due to the high historical external dependence, which in some cases reaches more than 90%.
International geopolitical tensions, especially in the last three years, have made the supply of essential macronutrients more expensive, directly impacting harvest planning for a crop that consumes many chemical inputs.
The domestic economic scenario also adds a component that compromises margins in the field, especially with the country’s basic interest rate at 14.5%.
Logistics is another bottleneck mentioned. The volume exported grew 14 times, but the transport infrastructure did not keep pace. At the end, the flow depends on backport operators such as Wilson Sons, 3ALOG and TPC, which manage a stuffing capacity of 167 containers per day.
”What has increased our costs, then, are the interest rate, taxes, the issue of logistics too, whether you like it or not, it has had a huge impact, because with the increase in fuel prices, freight has also gone up, so it is one of the variables. I would say the rest of the things like this: we can manage it very appropriately and in a very competitive way within our agribusiness”, explained the producer.
Fiscal uncertainty and focus on quality
In the short term, the main source of concern goes by the name of Tax Reform. The implementation of the CBS (Contribution on Goods and Services) raises many doubts about how the sector will compete in the foreign market against countries that heavily subsidize their producers.
”The tax reform that is coming now, it is also very apprehensive, because, what do we have today? The producer, on revenue from rural activity, he has three taxes: Funrural, SAD and Senar, there are three. It is the only one that has it on top of revenue. With the reform, in the first phase, we will already maintain these three and we will include the CBS, with a rate of up to 11%. So, we know that, in any case, we will have more taxation starting next year. This also concerns us for the future”, warned Pitt.
The financial engineering to keep the plume competitive abroad forces the sector to invest heavily in the only factor capable of dictating prices in New York: absolute quality.
In response, Abapa (Baiana Association of Cotton Producers) inaugurated the expansion of its Fiber Analysis Center in Luís Eduardo Magalhães at the 20th edition of the Bahia Farm Show.
The laboratory, considered the largest in Latin America in the classification of feathers by HVI (High Volume Instrumentation), received contributions totaling R$ 120 million in accumulated investments. With a modernized structure of 5,200 square meters, processing capacity increased from 34,000 to up to 70,000 samples analyzed per day.
The expectation for this harvest is ambitious: reaching the mark of 5 million samples tested in an uninterrupted operation, operating 24 hours a day, seven days a week.
Energy on the table: The new frontier of efficiency
It is precisely in this situation of squeezed margins and technological expansion that electricity is no longer seen as an inevitable fixed cost and begins to appear as a strategic variable to reduce costs.
Realizing this niche of heavy consumption, Neoenergia mounted a commercial offensive in Western Bahia, targeting the entire cotton chain — from the producer who operates the pivots to the processing plants (the cotton mills) — for the Free Energy Market.
This is a contracting environment in which the industrial consumer is no longer subject to the fixed tariffs of the regulated distributor and begins to negotiate deadlines, volumes and prices directly with the supplier.
Although Western Bahia is home to modern industrial parks, adherence to the free market is still considered timid in the region, especially among producers who cultivate non-irrigated areas (rainfed).
According to data released by Neoenergia, those who carried out the migration until last year captured a cost reduction of up to 30%.
For new entrants from the regulated market, the estimated relief on the bill reaches 10%, mitigating the immediate impacts of triggering tariff flags.
“There is a huge amount of energy needs here in this region and we know that cost reduction for them is very important”, explained Leonardo Souza, commercial manager at Neoenergia.
“So we have a high potential here for energy costs for these companies and we have brought them opportunities to reduce costs by 20%, 30%. This means they can invest more in their business, they can look for more tools, more development for their own business”, he continued.
The company already has more than 50 clients in the region who have made the migration, including some cotton farms. The process takes 180 days and, at the end, the producer starts paying two invoices (distributor and trader), but the sum is lower than what he paid before. Five- to ten-year contracts guarantee cost predictability over several harvests.
With a large number of solar panels throughout the region, Leonardo Souza also clarified that the free system does not compete with self-generation.
“There is no impossibility for him to [produtor] migrate to the free market because it has solar energy. In fact, I understand that it has even more potential for cost reduction there, in production. So, what we do is combine the two benefits. It will have solar energy, which will increase its load even more, but we will also migrate to the free market. Today, there is a technology where we can prevent this solar energy from being injected into the distributor’s system. So, for this reason, there will be a reduction in both solar energy and the free market. He has a win-win, in this case, called a real win-win”, he stressed.
Green traceability as a commercial asset
In addition to the financial factor, there is an invisible currency that is starting to weigh on the negotiating tables of large international trading companies: sustainability. The energy supplied by the supplier is generated from the group’s own assets — consisting of 44 wind farms, in addition to solar and hydroelectric complexes —, operating with more than 90% of the matrix based on renewable sources.
This energy reaches the customer with international certification of origin (I-REC), allowing the producer and the cotton gin to prove the reduction in greenhouse gas emissions.
In a global scenario where the socio-environmental traceability of sustainable fashion dictates the rules of consumption, proving that Bahian “white gold” was harvested and processed using clean electricity has become a powerful sales argument.
“This energy is certified, so the customer can use it both to reduce greenhouse gases, and also for marketing, because he is producing his product with a renewable energy source, which is even more important, both to demonstrate his commitment to society, and to reduce its cost, because it is cheaper energy”, highlighted Leonardo Souza.
The planted area in western Bahia has the capacity to double in the coming years, driven by management that protects crops from climate risks.
“Thank God that we have varieties and we have learned a lot in terms of management, soil structuring, that we can mitigate issues, for example, climate and guaranteeing more satisfactory average productivity. These productivity are, in a way, balancing this increase in costs”, assessed Sérgio Pitt.
