Australia'S Cotton Area Decreased By 83% To 40 Years Ago.

Australia's cotton planting area has dropped to its lowest level in 40 years as drought has severely restricted cotton irrigation water and cultivation. In its June report, the Australian Bureau of Agricultural Resources Economics (ABARES) said that due to insufficient supply of irrigation water, lint output in 2019~2020 will be reduced by 72% to 134 thousand tons. The report says cotton planting area is estimated to be reduced by 83% to 60 thousand hectares, the lowest level since 1978~1979.

The supply of cotton in Australia is relatively low, which is in sharp contrast to most countries in the United States and the world: because of the continuous blockade of the COVID-19 pandemic and the deteriorating retail environment, the global cotton supply is in excess of demand.

The U.S. Department of Agriculture reduced the global cotton consumption forecast by 1.8% in June, and raised the global cotton reserve forecast in August 2021 to the second highest level since 1960.

Michael O'Rielley, chairman of the Australian Cotton Shippers Association, said that the decline in cotton prices was due to a decline in demand for cotton in the global market. However, compared with competing countries, Australia's small cotton planting (reduced supply) provided some support for its price.

However, he said: "as global demand continues to fall, prices will face greater pressure than at present."

ABARES pointed out that due to the closure of some factories this year and the price competition of synthetic fibers, the global cotton index price in 2020~2021 is expected to decline 12% from a year earlier to 63 cents per pound.

"We expect cotton output to reach 550 thousand to 600 thousand bags this year." Australian Cotton Corp (Cotton Australia) CEO Adam Ke (Adam Kay) said. A packet of about 227 kilograms of fiber.

"The previous year was 2 million 200 thousand packs, and the previous year was 4 million 100 thousand packs, so you can see the impact of drought." Kay said.

However, he said that in February and March, the river began to flow and the dam began to store water, so the estimate for next year's harvest is more optimistic, perhaps 1 million 700 thousand packages. "It is beginning to move in the right direction."

Kay said that most of the output this year and next year has been sold to China in advance, giving Australian farmers a sigh of relief in the decline in coronavirus related demand.

However, the US Department of agriculture's monthly report on global cotton supply and demand in June estimated that cotton consumption in mainland China decreased by 218 thousand tons in 2020~2021.