By Wendy Pugh
Nov. 2 (Bloomberg) -- Cotton production in Australia, the fourth-largest exporter, is forecast to reach an all-time high this season as record prices and above-average rainfall prompts increased planting, according to a producers’ group.
Output may more than double to 3.7 million to 3.8 million bales from 470,000 hectares (1.2 million acres), according to Cotton Australia Chief Executive Officer Adam Kay. That compares with an October forecast of at least 3.5 million bales from 450,000 hectares. A bale weighs 227 kilograms (500 pounds).
Cotton futures have surged to a record as cold weather curbs output in China amid a global supply shortage before northern hemisphere crops become available. Australia had its third-wettest October, according to the Melbourne-based Bureau of Meteorology, raising water levels in irrigation dams and boosting farmers’ confidence in planting crops that rely on rain.
“Because the prices have hit these record highs, that has encouraged people,” Kay said by phone today. “I heard one guy describe the other day how people are planting everything bar the tennis court.” Sowing was 80 percent to 90 percent finished and would be completed in about 10 days, he said.
December-delivery cotton advanced as much as 1.9 percent to a record $1.3176 a pound today on ICE Futures U.S. in New York, before trading at $1.3160 at 5:24 p.m. Melbourne time.
Australian output is rebounding from 1.7 million bales last harvest and a 30-year low of about 500,000 bales in 2007-2008, when drought cut production, according to industry figures. The crop reached a record 819,000 metric tons (3.6 million bales) in 2000-2001, government data show. The season runs from August to July, with harvesting from March to May.
Water Supplies
Water storages in the Murray Darling Basin, where more than 90 percent of Australia’s cotton is grown, were 73 percent full as of Oct. 27, data on the basin management authority’s website showed. The basin had the most October rainfall since 1975 as a La Nina weather event, characterized by cooling tropical Pacific Ocean temperatures, brought wet weather to Australia’s east, according to the Bureau of Meteorology.
Global cotton output will rise 16 percent in the year to July 31 to 25.3 million tons as high prices boost planting, the Washington-based International Cotton Advisory Committee said yesterday in a report.
