MUMBAI (Commoditiescontrol) – As demonetization created an artificial shortage of both raw cotton and ginned cotton, consumers are turning to import, particularly from Australia. For Australia, it will continue to benefit from the demand as cotton production has risen significantly in last two seasons. For 2016-17 season, it is expected to produce 4.5 million bales.
According to Adam Kay, chief executive Cotton Australia, China’s stockpile of cotton remains a concern as in the past Australia exported 60-70 per cent of its cotton to China and two seasons ago just 2-3 per cent were shipped to India. But now India accounts for about 25 per cent. The increase also emanates from the fact that Indian spinners prefer and have a taste for high quality Australian cotton.
The December Australian Bureau of Agricultural and Resource Economics and Sciences crop report estimated cotton production in NSW would rise 62 per cent in 2016-17 from the previous season to 637,000 tonne of cotton lint and 900,000 tonne of seed. In Queensland, cotton production is estimated to increase 69 per cent to 393,000 tonne of cotton lint and 555,000 tonne of cotton seed.
Going ahead, prices were looking positive and cotton can be forward sold in excess of US$500 per bale, much above the production cost, implying huge profits for growers, Kay added.
(By Commoditiescontrol Bureau; +91-22-40015522)