FED: Record plantings and higher export value for cotton

AAP General News (Australia)
12-15-1998
FED: Record plantings and higher export value for cotton

(EDS: EMBARGOED TO 1200 AEDT TUESDAY DECEMBER 15)



CANBERRA, Dec 15 AAP - Record cotton plantings of 550,000 hectares are expected this year,
with the forecast value of cotton exports predicted to rise slightly to nearly $1.6 billion,
the federal governments major commodity forecaster said today.

The Australian Bureau of Agricultural and Resource Economics (ABARE) forecast a four per
cent drop in world prices in 1998/99, compared to 1997/98.

But it said it expected the value of cotton exports to rise 15.2 per cent to $1.596
billion, slightly up on the previous forecast of $1.590 billion.

The forecast rise in export value comes despite a revision down of ABAREs forecast for
world cotton prices (the Cotlook A index) which it says will retreat four per cent to average
US70c/lb in 1998/99.

ABARE said the drop, which follows a previous forecast of a rise in the price to US74c/lb,
followed slower growth in textile consumption and rising world stocks of yarn and textiles.

"World cotton consumption is forecast to decline by two per cent to 18.8 million tonnes in
1998/99 reflecting reduced demand," ABARE said.

World production is also forecast to drop more than six per cent from the previous year to
18.5 million tonnes.

At the same time, world stocks of raw cotton are forecast to dip by almost five per cent as
China and the US run down their stockpiles.

However, in Australia cotton plantings are expected to rise to a new record, with ABARE
upgrading its forecast for plantings from 472,000 to 550,000 hectares.

ABARE said the rise in plantings reflected abundant supplies of irrigation water following
flooding across northern NSW and southern Queensland in the leadup to the planting season and
also the locking in of favourable prices through hedging.

"Assuming average seasonal conditions for the remainder of the season, cotton lint
production is forecast to increase by more than 13 per cent from last year to 758,000 tonnes,"
ABARE said.

AAP msl/mfh/rsm/br

KEYWORD: ABARE COTTON

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