THERE are some positive signs for the 2024 Australian cotton crop with global demand increasing while major competitors are facing crop shortfalls due to seasonal conditions.
Ahead of World Cotton Day tomorrow, cotton merchants and shippers are reporting a higher level of engagement with buyers from multiple countries while emerging markets are stepping up their orders.
Raw Australian cotton was exported to 16 different markets in 2023 with Vietnam, a country targeted by Australian cotton merchants under the federal government’s Agricultural Trade and Market Access Cooperation program, now taking close to 37 percent of Australia’s cotton.
The ATMAC program has also allowed stronger engagement with Indonesia and Malaysia, with the countries now taking more than 20pc of our total cotton exports combined.
Other highlights include Turkey, Bangladesh and Thailand, importing close to 15pc of Australia’s total export offering.
Cotton Australia chief executive officer Adam Kay said the trade figures were positive signs.
“Our farmers have virtually sold out of the 2023 crop to merchants and indications are we have forward sold about a third of our 2024 crop with prices of $700 per bale remaining steady,” Mr Kay said.
Mr Kay said the industry was also in talks with India to double the Free Trade Agreement’s 50,000 tonnes of tariff free cotton.
ADM Trading head of cotton Arthur Spellson said there was still some caution about demand from China with no formal change in the trade relationship.
“We know Australian cotton is being shipped into the country, but we don’t know how much is being cleared by customs for Chinese mills,” Mr Spellson said.
“We continue to work with buyers from all over the world and our merchants have done an excellent job marketing our cotton to new and emerging markets.”
Mr Kay said with Australia again entering an El Niño there are mixed expectaƟons for the 2024 crop.
“Growers with irrigated cotton are already planning their water budgets to ensure good soil profiles for their crops while dryland growers are weighing up their opƟons and hopeful of rain to provide extra incentive to plant.”
Cotton industry forecasts for the 2023‐24 crop range from 4-4.5 million bales with ABARES latest outlook for natural fibres forecasting the gross value of cotton production to fall to $3.2 billion, down 8pc from the estimated $3.5B in 2022-23.
Global cotton prices are expected to increase by 2pc in 2023-24, driven by expected higher consumption and lower global production.
Mr Kay said despite macroeconomic factors dampening demand for cotton overall, farmers have some cause for optimism.
“Our sustainability efforts are making a major impact and overseas buyers want our cotton because of its reputation for quality, colour and strength.
“The efforts of our Cotton to Market team are also being recognised with more brands demanding our cotton for their consumer items because of our environmental outcomes and our strategic roadmap which is focussed on meeting global sustainability target areas.”
A scan of the global cotton markets suggests Brazil, one of Australia’s key competitors, has had a good season and has been exporting a substantial amount to China, while the US crop is down by around 4pc with lower production also reported from India and China.
Source: Cotton Australia