Forecasts say drought will slash Australian cotton output

Image credit: freedigitalphotos By: scottchan

Australia is the third biggest exporter of cotton in the world, but cotton production in the country is in danger of reaching its lowest point ever due to the prolonged drought.

Image credit: freedigitalphotos By: scottchan
Image credit: freedigitalphotos By: scottchan

According to a news article on Bloomberg, Michael Murray, Policy Manager for Queensland and water at Sydney-based Cotton Australia, claims that the 2013-2014 cotton output might be less than the 4 million bales predicted last September.

The dry weather is pin-pointed as the main cause for the decline in farm output in the $1.5 trillion economy, with an astonishing 65% of Queensland in drought.

“It’s been a hotter and drier summer than usual and water use has been a little higher than average. That’s meant that in some valleys, some growers are running short of water,” said Murray.

“There’s still a lot of uncertainty where it is going to end up,” said Nick Hungate, London-based Head of cotton at RCMA Commodities Asia Pte Ltd., referring to the Australian crop.

According to the December estimate by the Australian Bureau of Agricultural and Resource Economics and Sciences, there was a 6.6% decline in 2013-2014 in terms of area planted to cotton nationwide in comparison to last year.

Further, according to Canberra-based Abares, production is also expected to decline to 975,000 metric tons in 2013-2014 from 1 million tons. Abares also predicts a boost in export due to the fact that slaughtering is to increase 5.6% to 8.9 million head in the year to June 30, as a result of dry pastures, while the price of sorghum, used to feed livestock, has reached the highest mark since 2007, increasing to A$346.50 a ton in January.

“Obviously there is a very serious drought problem in western Queensland,” Premier Tony Abbott told reporters in Brisbane.

“Parts of New South Wales and even parts of northern Victoria are suffering from the drought and the Government is looking at bringing forward the start of a plan that provides income support to people in exceptional circumstances,” he said.

 Farmers are hopeful that the Government will step up to the plate and provide the much needed financial assistance.