Australia's best cotton harvest in years is gathering pace, producing better tonnages than first thought and raising hopes for a return to the good times of the past. Production for the year to June 30 is expected to outstrip a forecast made just a couple of weeks ago for 2.4 million bales, worth more than A$1 billion ($787 million) which would be up 57 percent on the previous year's drought-affected harvest.
"We'll be in full harvest swing in about two weeks time. It looks like our yields are coming in much better so we're looking forward to a crop which will be larger than the 2.4 million," Christine Campbell, chair of industry body the Australian Cotton Industry Council, told Reuters on Monday.
Australia is the third largest cotton exporter in the world, after the United States and Uzbekistan, but output in recent years has been hit by water shortages caused by drought and restricted allocations.
Harvesting is underway in the northern part of Australia's Cotton Belt around Emerald in Queensland, and will continue through until the end of May.
The young industry staged a strong rise until 2001/02, its last year of sizeable production, when lint output amounted to 745,000 tonnes, or 3.3 million 500-pound bales.
Production halved the following year to 387,000 tonnes, or 1.7 million bales, as Australia's worst drought in a century dried up dams used in the water intensive industry.
Since then the industry has been struggling, and failing, to re-gain annual production of three million bales. "Hopefully we'll get closer to it each year," Campbell said on Monday. "We need rain."
With good rain, Australia would be back producing 3 million bales of cotton lint next year, double the 1.6 million bales produced in 2003/04 in another drought-affected season.
Campbell said intensified planting techniques and the first full season of the improved genetically modified Bollgard II cotton was boosting Australia's cotton crop.
Over 70 percent of Australia's cotton crop will be genetically modified in the current season's crop.
A free trade agreement being investigated by China and Australia would be a boost the Australian industry, Campbell also said.
Australia already exports cotton to China under quotas based on estimated shortages of supply. A trade agreement would significantly de-clog the system by allowing more direct contact between Australian exporters and Chinese importers, she said.
A winding down of subsidies in other producing countries such as the United States, if the current trade liberalisation round in the World Trade Organisation produces results, would further promote Australian cotton, she said.
The government's Australian Bureau of Agricultural and Resource Economics recently forecast production of 608,000 tonnes, or 2.7 million bales of cotton, in 2005/06, up from 551,000 tonnes, or 2.4 million bales, in 2004/05.
"We've got a good chance of being there," Campbell said. But restricted water supplies may continue to limit growth.
Cotton farming has come under intense competition for water supplies in the past five years as successive droughts and a political focus on water shortages has highlighted the industry's heavy water use.
This has raised doubts about the ability of the industry to secure enough water to meet its hopes for long-term growth.
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