The World index price for cotton is forecast to drop by 14% in 2012-13 (August to July) to typical US86 cents a pound. This forecast decline reflects the effects on world prices of big world cotton stocks carried over 2011-12 and world cotton production being forecast to exceed consumption for the third straight year in 2012-13.
To the demand side, an assumed recovery of world income growth in 2013 is anticipated to lead to a modest upsurge in word interest in cotton within the latter half of 2012-13. For 2012-13 as a whole, world cotton consumption is forecast to grow by 3% to 23.6 million tonnes, compared with a decline of 7.5% in 2011- 12.
World cotton production is forecast to drop to 24.9 million tonnes in 2012-13, 6.7% down in the record crop of 2011-12. This reflects an anticipated 7% drop within the area planted to cotton in response to falling cotton prices and increase within the costs of alternative crops, especially corn, soybeans and grain sorghum.
Global closing stocks of cotton are forecast to rise by 9% in 2012-13 to a record 16.1 million tonnes, lifting the world cotton stocks-to-use ratio to a record high of 68.2%. Australian cotton production is forecast to be 991 400 tonnes in 2012-13; 7% lower compared to the record harvest of 1.07 million tonnes in 2011-12. This outlook is supported by availability of abundant supplies of irrigation water in regions. The area planted to cotton is forecast to drop by 14% in 2012-13 to 5150000 hectares. Dry land plantings are forecast to be 8% higher in 2012 – 13 due to a higher percentage of higher yielding irrigated cotton within the total area planted to cotton, while irrigated plantings are forecast to drop by only 4%.
Cotton production in Queensland is forecast to drop by 10% in 2012-13 to around 3680000 tonnes. A prediction 17% decrease within the area planted to cotton expected to be partly offset through an assumed 8% increase within the typical return to 1.8 tonnes per hectare. The area planted to dry land cotton is forecast to fall by 48% to around 40 000 hectares, even though the area planted to irrigated cotton is forecast to drop by 2% to 160 000 hectares.
This is actually the cheapest yield to when growers received $ 481 a bale, and below the average to 2010 – 11 of around $ 545 a bale (in 2012 – 13 dollars)., Australian cotton growers since 2006 07.
Australian cotton exports are forecast to rise by 4% in 2012-13 to a record of 1.04 million tonnes. Whether this outlook is realised. Australia would surpass India to become the 2nd largest exporter of cotton within the world; 2nd to america. In 2011-12, Queensland exported around 5260000 tonnes of raw cotton, accounting for 39% of total Australian cotton exports.