Australia Cotton Production Hit By Lower Prices

Australia's cotton production is expected to slump by nearly a quarter in the current marketing year as producers slash their plantings in the face of lower world prices, Rebecca Gowen, a specialist at the US Department of Agriculture's Canberra office, said.

The forecast for output of 4 million bales of cotton in the 2012-13 marketing year, which started in August, is down a further 6 per cent from Ms. Gowen's September prediction and would mean a 25 per cent decrease in production on the year. Ms. Gowen predicts plantings will be down as much as 30 per cent on the previous year due to competition from other crops.

For the 2011-12 crop, however, Ms Gowen raised her previous forecast by 2 per cent to a record 5.3 million bales as mid-season flooding had less of an impact on yield than expected. With such unprecedented output, she estimated traders exported 4.6 million bales over the year.

"After back-to-back record crops, there are limits to how much area can be re-planted to cotton year-on-year," Ms Gowen said in a report. "The shift in area planted is further supported by current high prices for alternative summer crops such as corn and sorghum."

Australia is the world's fourth-largest cotton exporter, with shipments of the clothing fiber earning the country around 3 billion Australian dollars (US per cent3.13 billion) in revenue in 2011-12, according to industry body Cotton Australia.