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Cotton offering snapped up by China, but the industry predicts next season's crop could triple in size

By Amelia Bernasconi and Cara Jeffery, Wednesday June 3, 2020 - 07:42 EST
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Ongoing drought and insufficient water allocations set up NSW for its smallest cotton crop since the 1980s. - ABC

The smallest Australian cotton crop in 40 years has already been snapped up by China.



It is expected only half a million bales of cotton will be produced nationally this year.

The majority of that crop, about 150,000 bales, will come from the New South Wales Southern Valley, which takes in the Lachlan, Murrumbidgee and Murray regions.

Southern Cotton chief executive Kate O'Callaghan said they had started ginning at the Whitton site in the Riverina, and estimated they would be down more than 100,000 bales due to a lack of water allocation for growers. 

"We are expecting to only process 75,000 bales, that is significantly down on the average of 180,000 bales we gin each year," she said.

Mrs O'Callaghan said it was a challenging growing season, but many growers still averaged 10 to 11 bales per hectare.

"It was a slow emergence back in spring when it was cold, then it was too hot and too smoky in the middle of the season," she said.

"Then the cool autumn was too cold for top fruit to mature, and now the late-autumn break has made it a bit wet and it's been stop-start in terms of picking." 

Due to the reduced crop the Whitton gin is only operating 20 hours a day from Monday to Friday, with two shifts operating separately under coronavirus restrictions.

That arrangement will continue until the end of July. 



No relief for the north

In the north of the state, Moree's Brighann Cotton gin will only open for a week and process its smallest offering ever, about 6,000 bales.

"The average bales that we do in one year is generally about 83,000, that's been since 1999 when we opened the place," general manager Ian McDonald said.



Like Southern Cotton, Brighann would normally work around the clock.

"It's been overwhelming too, with COVID, how many travellers have been applying for jobs from Sydney on their way through and we're just unable to provide any of that opportunity this year," he said.

Mr McDonald said there was no room for casual workers, with the focus on keeping the current permanent staff busy.

"All of a sudden the guys that are used to being in the control room are going to be sewing bags," he said.

"Always tough decisions when you get in to a jam like this.

"We do get used to it, agriculture is volatile, but this one has been really tough."



Australian cotton too important for China to ditch

The fibre is forward sold to China, a country that consistently buys three quarters of Australia's cotton.

"This year they'll certainly be able to take everything that we produce," Mr McDonald said.

Brighann Cotton also has an office in Beijing and has been closely monitoring diplomatic tensions between Australia and China.

Mr McDonald does not expect that to affect the cotton market.

"China is very reliant on Australian cotton, it's a niche market in there that the other countries haven't been able to compete with," he said.

"It's one of the things that's probably too important for them to ditch."

Cotton Australia chief executive Adam Kay said quality had been good, and that was Australia's real point of difference to the rest of the world.

"Pretty much all of [the crop] was forward sold at some good prices, but we're certainly watching the world market," he said.

Mr Kay said worldwide shop closures due to COVID-19 were seeing a sharp decline in demand.

"We've already seen probably 20 per cent wiped off the price, so we've come from in excess of $600 a bale back to more like $520 a bale."



Crop could triple next season

Mr Kay predicted the national crop would more than triple next season, if water allocations were increased statewide.

"The crop that we're picking at the moment, we think is going to be about 550,000 bales," he said.

"Next season we think we've got about 1.7 million bales at the moment and as it keeps raining and dams keep filling, hopefully that number gets bigger.

"We'd like to think a good year is in excess of three million bales, so it just gives you an idea of just how tough the drought has been the last few years."


- ABC

© ABC 2020

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