Australia said its cotton production could fall by 19%, the world’s third-biggest cotton exporter cut its output forecast to 580,000 metric tons for 2014-2015 from 820,000 tons forecasted in June, according to a report from the Australian Bureau of Agricultural and Resource Economics and Sciences.
The cut in the country’s output forecast would be the smallest in five years, falling from 890,000 tons seen in the previous year, the bureau added.
Cotton futures have fallen by 24% in 2014 as the increasing supply in the US, the largest exporter weighs on prices. The world’s biggest exporter increased its forecast by 36% for 2015. The Australian output my fall as low as 50% as drought in the country could curb planted areas, according to Cotton Australia’s august report.
Output may fall between 2 million and 2.5 million bales in 2014 – 2015, from approximately 4 million bales this year, Cotton Australia Chief Adam Key said in August.
“What we’ve had over the last couple of years is dam levels sufficient for irrigation,” said Abares Agricultural Commodities manager Peter Collins. “This year, the dam levels are a bit lower so the supply of irrigation water is not going to be as good as it has been,” he added.
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Cotton futures traded around 64.75 cents today on the ICE Futures US as production in the world’s biggest exporter in the 12 months that began Aug 1 will be around 17.5 million bales, according to the US Department of Agriculture.
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