Australia is all set to touch just below 1 million tonnes in raw cotton exports to become the third largest exporter of raw cotton in the world this year, according to a bank report.
The National Australia Bank (NAB) Agribusiness Rural Commodities Wrap in the report said that a recovery in cotton prices was likely to have acted as an incentive to production, with prices above historical average levels and more favourable than alternative crops. However, dry land cotton plantings are minimal due to the extended and extreme drought conditions that impact growing areas.
According to NAB Agribusiness’sGeneral Manager, Khan Horne, the Australian dollar was forecast to track lower to 84 U.S. cents by the 2014 December quarter, which should provide further benefits to exporters.
It is not surprising the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) is predicting an easing off of exports this year to just below 1 million tonnes. As, Australia have hit record exports of cotton in 2012-13.
China has been the biggest influence on global exports over recent years and that looks set to continue. Two years of stockpiling cotton has lifted China's stocks-to- use ratio to the point where it would be self-sufficient for 18 months without any production or trade. This has pushed the world ratio to an all-time high of 89%. A speedy recovery in the economy of major developed countries is also contributing to a turnaround in the global textile sector.
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