March 21, 2012

Australia's cotton crop may fall 8.2%

As farms are overwhelmed in Eastern side, harming crops and curbing output, Australia's cotton production may drop as much as 8.2%, according to a producers' group.

Output may be 4.5-4.6 million bales that compares with a prior estimate of about 4.9 million bales said Cotton Australia Chief Executive Officer Adam Kay.

Flooding in Queensland and the neighbouring state of New South Wales may have caused AUD50 million (US$52 million) of damage, said Federal government. A reduced cotton harvest may curb global supplies, helping boost prices that tumbled 37% last year. Output may surge 25%to a record five million bales after floods last year boosted water supplies and spurred plantings.

About 20,000 hectares (49,421 acres) of irrigated cotton and 20,000 hectares of dry land crops have been lost due to the flooding. The deluge may damage as much as 10% of the cotton crop.

Australian cotton industry would have been on its course to achieve the estimated output of 1.09 million tonnes this season, making it the highest output. Almost the entire cotton production of Australia is exported, making it a leading source of cotton for China and other Asian countries.