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Positive prospects for Australian cotton season
Sep '12
Cotton Australia has issued its first pre-season comment on prospects for the 2012-13 cotton season. CEO Adam Kay said the new crop year was pregnant with both problems and opportunities, but on balance the positives should outweigh the negatives.

On the positive side, he noted a firm financial base from last year’s record crop that embraced 5.4 million bales, coupled with a welcome return to abundance in stored water availability, and boosted by the continued presence of high-yielding transgenic cotton varieties.

He noted recent comments from ABARES, the Federal Government’s independent research and analysis group that the average storage level of public irrigation dams serving cotton growing regions was at 95 per cent of capacity, much higher than the 52 per cent at the same time in 2010.

ABARES projects that the area planted to cotton in Australia is forecast to decline by 14 per cent in 2012–13 to 515 000 hectares. While irrigated plantings are forecast to decline by only 4 per cent, dryland plantings are forecast to be down 44 per cent, with significant variation between regions.

“While ABARES observed that world cotton production would exceed consumption for the third successive year, the recent rend towards lower cotton prices should restore cotton’s textile competitiveness and lead, eventually, to an improvement in mill use, trade and consumption.

“This will help bring the world stocks-to-use ratio back into more equitable balance, whereas it is currently acting as a negative blanket permeating the industry with pessimism and distorting the longer-term economic outlook,” he said.

The negative side of the future scenario for cotton this season is mainly in the international arena where supplies remain plentiful, textile demand remains weak, competition from alternative fibre remains strong, market share is subsiding, and world economic growth to pull cotton through the marketing pipeline remains uncertain.

China and India, the world’s largest producers and consumers of cotton, obviously hold the key to the industry’s prospects, forcing growers and analysts to focus on their seasonal conditions, weather prospects, economic and trade issues, their individual domestic policies, and above all, the validity of statistics emanating from those countries and other international agencies.

“Having said that, if world prices and seasonal conditions improve over the next month or two, getting between a cotton grower and a ready-to-plant irrigated cotton field could be a life-threatening experience,” Adam Kay said.

“Continuation of high yields are vitally important to counter any price declines, contain rises in the price of energy and other inputs, and to assist cotton’s competitiveness with other favourable crop rotation options,” he said.

Overall, he noted it would be a challenging year for all segments of the domestic industry, with improved production, management and marketing skills paramount, coupled with continued productivity along the processing and marketing pipeline.

The 2012-13 planting season has already started in the Central Highlands and Mackenzie regions of central Queensland, and will soon commence in the Dawson/Callide and Darling Downs regions, before gradually expanding to western and southern regions, in line with industry-agreed specified planting windows for transgenic cotton.

Cotton Australia

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