Australian Cotton Production Set Record, Export Pre-Sale Strong

Australian cotton farmers will sell out 2022 new cotton in a few weeks, although Australian cotton production this year is as high as 55.5 million bales, according to the Australian cotton association. The association also said Australian cotton farmers were ready to sell 2023 cotton, despite significant fluctuations in international cotton prices.

According to the association's statistics, up to now 95% of new cotton has been sold in Australia in 2022 and 36% in 2023. Adam Kay, CEO of the association, said that in view of the record cotton production in Australia this year, the escalation of the conflict between Russia and Ukraine, the decline of consumer confidence, the rise of interest rates and the pressure of inflation, it is very encouraging that Australian cotton pre-sale can reach this level.

Adam Kay said that Australian cotton has become the only reliable source of high-grade cotton due to the sharp decline of American cotton production and the extremely low stock of Brazilian cotton, and the market demand for Australian cotton is very strong. At the Australian cotton conference held recently, Louis Dafu CEO Joe Nicosia said that the demand of Vietnam, Indonesia, India, Bangladesh, Pakistan and Turkey is increasing this year. Due to the supply problems of competitors, Australian cotton has the opportunity to expand the export market.

The Australian cotton merchants association said that before the sharp fall in cotton prices, Australian cotton export demand was very good, but then the demand of various markets gradually dried up. Although sales continued, the demand had declined significantly. In the short term, cotton merchants will face some difficulties. The buyer may cancel the high price contract in the early stage. However, Indonesia has been stable and is now the second largest cotton export market in Australia.