Wool and cotton production for 2012/13

Australian Wool Innovation (AWI) has published a wool and cotton production forecast for next year.

The Australian Wool Production Forecast Committee (AWPFC) has revised down slightly its final 2011/12 estimate from 345 mkgs to 342 mkgs and its 2012/13 production forecast from 350 mkgs to 345 mkgs. The downward revision in Australian wool production was largely based on lower final sheep numbers as reported by the Australian Bureau of Statistics (ABS) in June 2012.

A report released by Economic Intelligent Unit (EIU) shows a decrease in global wool production for 2012/13, mainly driven by alternative land use. In New Zealand the long term decline in sheep numbers has yet to be reversed, despite relatively good returns to farmers. There has been an increased number of farmers moving into dairy and increasing their sheep slaughtering to meet the growing demand for sheep meat. In Argentina, farmers are switching to food crop production, increasing the area of land for arable farming. Over in South Africa, growers are looking to increase sheep numbers after the outbreak of diseases, albeit slowly due to predator issues.

Cotton production for 2012/13

New season for cotton report released by International Cotton Advisory Committee (ICAC) shows cotton prices likely to remain low, stocks jumped by 47% to 13.6m tons in the 2011/12 season, and cotton production to fall by 9% to 24.7m tons in the new season.

This latest report shows mill use of cotton will continue to erode as a result of the Chinese government enforcing a minimum price and a sliding scale tariff. The loss in mill use of cotton in China is being offset by rising polyester and rayon use, resulting in a rapid decline in cotton’s market share, however, other large countries’mill use is rising or holding.

The continued rise in prices of grain and oilseeds will reduce cotton area in the southern hemisphere. World cotton production for 2012/13 is two million tons greater than consumption, ending stocks are forecast to rise to nearly 16 million tons by July 31 2013. The ratio of ending stocks to use outside China is forecast to rise to 0.62, the highest since 1965.66, when it was the US, not China that was operating a de facto world cotton buffer stock in an effort to support domestic farmers.