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Cotton & products Qtly lock-up report 2007

Mar '07
Total cotton production for 2006/07 is forecast at 227 TMT, a decline of over 60 percent below the previous year level. The ongoing drought conditions led to abandonment as producers with reduced water allocations redirected water to focus on smaller areas; the 2006/07 harvest could potentially be the lowest sown area since 1983-84.

Severe drought conditions have continued throughout Australia since Post's last report. The drought, which began in 2002/03, has affected both inland cotton growing areas and adjacent catchment areas. The southern catchment area of NSW, for example, is reported to have suffered the worst drought in over 100 years. Extreme high temperatures in January and February have also added to the already difficult growing conditions.

ABARE has recently revised its forecast for 2006/07 cotton area downwards to 143,000 hectares, or 59 percent below the previous year's historically low area. This makes the 2006/07 harvest potentially the lowest sown area since 1983-84. The same report cited abandonment as one of the reasons for this low figure as producers with reduced water allocations redirected water to focus on smaller areas.

Central Queensland is the only significant cotton-growing region in Australia to receive average to above average rainfall this summer. Ironically, this region is preparing for harvest (due to commence in March) and some of the crop is believed to have suffered weather damage as a result oflate rain. More recently, heavy rainfall has been received in coastal and tableland areas as well as northern NSW, but this is not expected to change cotton production or area numbers.

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