Outlook '08: Prices to firm as cotton fights back

Friday, March 07, 2008

Cotton is expected to remain Australia's most profitable broadacre irrigated crop as the industry fights back from the impact of drought, the national Outlook 2008 conference was told today.
Cotton prices are expected to firm slightly during the next two years on the back of strong consumer demand and a smaller crop in the US.

ABARE is predicting a Cotlook A index price of US76 cents a pound for both 2008-09 and 2009-10 compared with an estimated US71c this financial year.

The Cotlook index is tipped to rise to US77c in 2010-11 before shedding three cents the following year as global consumption grows to a forecast 30.4 million tones in 2012-13, four million tones more than the record output of 2004-5.

Consumption is also predicted to grow by 25pc over the same period, driven up by growing incomes in developing countries.

ABARE expects Australian production will reach 719,000 tonnes of lint off 351,000 hectares by 2012-13 compared with predicted production of 497,000 tonnes next season.

SOURCE: Extract from special ABARE Outlook report to appear in the Rural Press weekly agricultural newspapers and The Land.