Total cotton production for 2006/07 is forecast at 227 TMT, a decline of over 60 percent below the previous year level. The ongoing drought conditions led to abandonment as producers with reduced water allocations redirected water to focus on smaller areas; the 2006/07 harvest could potentially be the lowest sown area since 1983-84.
General:
Severe drought conditions have continued throughout Australia since Post’s last report. The drought, which began in 2002/03, has affected both inland cotton growing areas and adjacent catchment areas. The southern catchment area of NSW, for example, is reported to have suffered the worst drought in over 100 years. Extreme high temperatures in January and February have also added to the already difficult growing conditions.
ABARE has recently revised its forecast for 2006/07 cotton area downwards to 143,000 hectares, or 59 percent below the previous year’s historically low area. This makes the 2006/07 harvest potentially the lowest sown area since 1983-84. The same report cited abandonment as one of the reasons for this low figure as producers with reduced water allocations redirected water to focus on smaller areas.
Central Queensland is the only significant cotton-growing region in Australia to receive average to above average rainfall this summer. Ironically, this region is preparing for harvest (due to commence in March) and some of the crop is believed to have suffered weather damage as a result oflate rain. More recently, heavy rainfall has been received in coastal and tableland areas as well as northern NSW, but this is not expected to change cotton production or area numbers.
Production:
The forecast for total cotton production for 2006/07 has been reduced to 1.0 million bales, or about 227 TMT. If achieved, this crop would be more than 60 percent below the previous year level.
Severe drought has seen some crops abandoned while other crops received lower than optimal irrigation water. Industry sources suggest in some of the worst affected areas, as much as 40 percent of planted area may have received less than optimal water. Lower production will likely result in lower ending stocks and lower exports.
Yield:
The forecast of 1.0 million bales (or 227 TMT) harvested from 143,000 hectares assumes an average yield of 1.58 MT per hectare, just under the 10-year average of 1.65 MT per hectare. Industry sources report some crops to have suffered from reduced water allocation and will likely yield less cotton as a result.
Exports:
Australian cotton exports for CY 2006/07 are forecast to fall to 458,000 MT (2.0 million bales). Post does not anticipate reductions below this level are likely as majority of the 2006/07 shipments are from cotton harvested from the 2005/06 crop.
