April 6, 2012

 

Upcoming rainfall may limit Australian cotton exports

 

 

The cotton farmers of Australia may lose the chance to take its exports above one million tonnes for the first time due to upcoming rainfall.

 

The USDA's bureau in Canberra concurred with Australia's own crop officials that the country is on for another bumper harvest in 2012-13, after rainfall refilled irrigation networks and water courses to, in some cases, their highest for decades.

 

In Australia's interior, Lake Eyre filled for the first time in about 40 years, and for only the fifth time since 1885.

 

However, with the La Nina weather pattern which has brought the rain weakened, and not expected to return next season, growers without access to irrigation may switch to less water-intensive crops.

 

Cotton sowings on non-irrigated land, which have "historically only made a minor contribution to overall Australian cotton production", are believed to have hit record levels in 2011-12, the USDA bureau said in a report.

 

But "a return to more normal weather conditions in the lead up to 2012-13 is expected to see a sharp decline in the area planted to dry-land cotton".

 

Even with extra-irrigated sowings forecast for New South Wales, overall cotton area will decline by some 10%, the briefing said.

 

Cotton exports for next season were pegged at 4.4 million bales (958,000 tonnes), a record high but below the 1.08 million tonnes forecast by Abares, Australia's official commodities bureau.

 

The USDA staff also flagged the appreciation in the Australian dollar, fuelled by commodity shipments, which has "greatly diminished returns for Australia's agricultural exports".

 

They added: "The value of the Australian dollar is expected to remain high over the 2012-13 season and this will likely continue to constrain returns for agricultural exports."

 

The rise in trade would help Australia secure its place as the third-ranked cotton exporter, after the US and India, but ahead of Uzbekistan, which it is forecast as overtaking this season.

 

However, Australia also faces growing competition from Brazil, where farmers in Mato Grosso, the top soy state, have been increasingly looking at cotton as an alternative, raising sowings by 70% in 2010-11, to cash in on high prices.

 

Mato Grosso plantings were little changed in 2011-12, according the Mato Grosso Institute of Agricultural Economics, otherwise known as Imea.