The Australian cotton industry is forecasting a 2023 crop outcome that has the potential to again be over 5 mn bales despite the impacts of cooler than expected weather, and the heavy rain and floods that damaged farms and infrastructure while preventing or delaying planting.
Coming off a record 2022 crop of 5.6 mn bales, farmers were confident that water availability and other favourable conditions would contribute to another bumper crop in 2023. However, by late October, New South Wales had experienced one of its wettest years on record, according to a report by Cotton Australia.
“Our thoughts go out to all those impacted by the floods, and some will be facing a long recovery.
However, many other regions are reporting better than expected outcomes and we are predicting a crop of around 5 mn bales for 2023,” said Cotton Australia CEO Adam Kay. He added that many farmers suffered extensive damage to infrastructure and winter crops, but some positive signs are emerging.
The Australian Bureau of Agricultural and Resources Economics and Sciences (ABARES) is forecasting a 22–23 gross value of cotton production at around $3.4 bn with expectations that exports will reach a value of $5.1 bn because of prior shipping delays for the 2022 crop.
ABARES pointed towards softening demand for cotton lint that led to a significant decrease in world cotton prices in the second half of 2022; however, further significant price downgrades are not expected. Its December quarter Agricultural Commodities Report highlights inflation, increasing interest rates, and fears of an economic slowdown in the US and EU as factors that will have an impact on discretionary spending including clothing.
Kay noted the report’s commentary on the expected end to the wet La Nina conditions allowing for a timely harvest, ginning and export of the 2022–23 crop combined with an easing of international container constraints. He said: “One of the highlights in the report is recognition of the increasing demand globally for ‘fibre sustainability accreditation’ with an increasing number of major brands demanding sustainability in the cotton they use.
“Better Cotton is in demand globally, and as members, our certified myBMP cotton more than meets the standards of sustainability and accountability required by Better Cotton.”
While acknowledging volatility may continue until economies stabilise and consumer confidence improves, Kay said demand continues for quality Australian cotton, and prices may increase. The ABARES report suggests the 20 percent crop decrease in the US combined with low stock levels means “buyers will be looking to other premium cotton producers to cover inventories until the next cotton season. This may improve Australian cotton prices over the coming months.”
