Business

Cotton Australia Says Record Crop Almost Sold Out

Australian cotton growers appear certain to sell out of 2022 cotton within weeks, a huge success for the industry considering this year’s crop is predicted to be a record 5.5 million bales (Mb). Industry body, Cotton Australia, also believes growers are well positioned to market the 2023 crop despite global volatility. Cotton marketing news service Cotton Compass is predicting 95% of the 2022 crop is now sold and 36% of the 2023 crop is forward sold. Cotton Australia chief executive officer Adam Kay said these results are positive considering deteriorating consumer confidence amid rising interest rates and inflationary pressure, the impact of China’s COVID lockdown policy, and the war in the Ukraine. He said there was still strong demand for local cotton and growers are expecting positive returns from the 2022 crop. “Drought has reduced the US cotton crop by 4 Mb and with Brazil stockpiles low, for the next few weeks and months Australia is the only source of quality cotton,” Kay said. “There is a silver lining to China’s soft ban in that it has assisted us to establish valuable new buyer relationships while enhancing existing customer relationships. “Again this year we are getting good support from Vietnam, Indonesia, India, Bangladesh, Pakistan and Turkey.” Louis Dreyfus Company vice president Joe Nicosia told the recent Australian Cotton Conference that Australia has a window of opportunity to sell cotton to the world, but the lower prices meant timing was critical. “Our peaks are in their troughs so we will be able to fill the demand while US and Brazil cotton stocks are getting smaller, and India is also suffering due to flooding,” Nicosia said. “The most important decision is ‘when’ to sell, which has become a critical factor.” In the next six months, Australian Cotton Shipper Association (ACSA) will work to create increased demand for Australian cotton through in-market visits to Vietnam, Thailand, India, Bangladesh and Turkey as well as a range of communication activities with brands and supply chain partners.