Nov. 16 (Bloomberg) -- Cotton output in Australia, set to be the third-biggest shipper, may surge as much as 25 percent to an all-time high after floods boosted water supplies and prompted record plantings, according to a producersΆ group.
The crop may total 4.5 million bales to 5 million bales in 2011-2012 from 4 million a year earlier, said Adam Kay, chief executive officer of Cotton Australia. A bale weighs 227 kilograms (500 pounds). The planted area may gain 16 percent to a record 580,000 hectares (1.43 million acres), he said.
Increased production in Australia will add to global supplies, pressuring prices that have tumbled 55 percent from a record in March on ICE Futures U.S. in New York. The rains brought by the La Nina weather event last year inundated farmland and mines, raising water supplies for crops. Global stockpiles may rise 22 percent to 54.96 million 480-pound bales by July from a year ago, says the U.S. Department of Agriculture.
“ThereΆs less dryland crop and a little bit more irrigated and because irrigated yields more, that means weΆve got a big jump in production,” Kay said in an interview in Sydney. Regions that lost crops last season because of flooding have re- planted and farmers in areas that havenΆt traditionally grown cotton are sowing, he said.
March-delivery cotton gained 4.1 percent, the most since Aug. 12, to $1.0062 a pound in New York yesterday. Prices reached a record $2.197 per pound on March 7. AustraliaΆs season runs from August to July. Crops are being planted, with harvesting from March to May.
Water Supply
Water storage in the Murray-Darling Basin, where more than 90 percent of AustraliaΆs cotton is grown, was 88 percent full as of Oct. 26, according to the basin management authorityΆs website. Most of New South Wales and southern parts of Queensland have a 60 percent to 80 percent chance of above- median rainfall from November to January, the Bureau of Meteorology said Oct. 25.
The basin, which produces about a third of the nationΆs food supply, extends from southern Queensland to South Australia.
“That higher-than-average rainfall means that people have to potentially irrigate less and thereΆs also water going into the major storage dams and that then just sets up the juices for next season,” Kay said Nov. 11.
Cotton exports from India, the worldΆs second-biggest grower, may climb 14 percent this year to 8 million bales of 170 kilograms each in the crop year started Oct. 1, B.A. Patel, the joint textiles commissioner, said yesterday.
Global supplies
“Because of the higher prices in March, we saw Northern Hemisphere plantings expand because of the good price outlook and thatΆs meant more production and thereΆs a bit more carried over,” Kay said. “Demand is still strong.”
ChinaΆs imports may climb to 3.3 million metric tons in the year ending July 31 from 2.7 million tons a year earlier, according to the International Cotton Advisory Committee.
“WeΆre close to Asia, where the market is, and weΆre producing counter-cyclical to the Northern Hemisphere,” Kay said. “We export 99 percent of the crop and ChinaΆs become the prominent market for our cotton.”
World output will be 123.89 million bales, exceeding global use of 114.27 million bales, the USDA estimates.
