Australia is all set to almost touch a figure of one million tons in raw cotton exports to become the third largest exporter of raw cotton in the world, says the National Australia Bank (NAB) Agribusiness Rural Commodities Wrap report. It further said that recovery in cotton prices was likely to have acted as an incentive to production, with prices above historical average levels and more favorable than alternative crops.
However, dry-land cotton planting are minimal due to the extended and extreme drought conditions that impact growing areas. According to the report, the Australian dollar was forecast to track lower to 84 cents by the 2014 December quarter, which should provide further benefits to exporters. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) is also predicting an easing off of exports this year to just below one million tons. Australia had hit record exports of cotton in the year 2012-13.
China will continue to hold its influence on global exports, continuing the trend it has followed over recent years. Two years of stockpiling cotton has lifted China's stocks-to-use ratio to the point where it would be self-sufficient for 18 months without any production or trade. This has pushed the world ratio to an all-time high of 89 per cent. Report also said that a speedy recovery in the economy of major developed countries is also contributing to a turnaround in the global textile sector.
www.nab.com.au
