Cotton industry to shine

The cotton industry is expected to grow by a massive 128.8 per cent in 2020-21, according to a new report.

Cotton boost: According to an IBISWorld report , rainfall in the Murray Darling Basin was above-average in the six months to June, with some regions reporting their highest rainfall on record.

AFTER  some difficult years for cotton growers, a rebound for production is in sight.

During the past few years, cotton growers have been devastated by drought, with revenue in 2019-20 amounting to $433.7 million, compared with $2.8 billion in 2017-18.

However, within a year, the industry is expected to grow by a massive 128.8 per cent in 2020-21, hitting $961.8 million.

The new findings come from a IBISWorld report on cotton growing in Australia. which showed industry revenue was forecast to increase at an annualised 36.2 per cent over the five years to $2 billion.

According to the report, rainfall in the Murray Darling Basin was above-average in the six months to June, with some regions reporting their highest rainfall on record.

Cotton Australia chief executive Adam Kay said the industry was quietly confident.

“This year we have just picked about 600,000 bales, but next year we are looking at about two million,” he said.

“And if there is more rain over the next few months that could boost bales up even further,” Mr Kay said.

“Growers are quietly confident that water will run off into dams.”

And this month the Bureau of Meteorology has forecast above-average rainfall across most of the Murray Darling Basin over the four months through to November.

“Queensland dams in the Darling Downs are looking good, and also major storages in NSW have had good rain, but water will need to continue to run into those,” Mr Kay
said.

He said the industry was also excited about crops being harvested in northern Australia, which looked promising.

“There could be significant growth there in the medium term,” he said.

The report also indicated strong export demand despite “constraints due to the coronavirus crisis”.

But the world price of cotton was projected to decline in 2020-21 due to high global supply, the report showed, partially limiting revenue growth over the year.

During the next five years,, global cotton consumption was estimated to rise as a result economic and population growth, the report said, with developing textile industries in Asia anticipated to boost the volume of cotton exported from Australia over the
period.

And over the long term prices were expected to rise, report findings showed.

Global demand for cotton was predicted to grow at a faster pace than the volume of cotton produced over the period resulting in an under-supply, the report said.

MORE: RECOVERY EDGES CLOSER FOR COTTON