According to foreign news on August 17, Rabobank recently released a 10-year cotton outlook and stated that the Australian cotton industry is still suffering from the impact of drought and the new coronavirus epidemic, but opportunities are waiting ahead. In the future Australian cotton’s global export share is likely to increase significantly in 2010.
The growing Southeast Asian market and the tapping of cotton production potential in northern Australia will support export growth, the report said.
Rabobank analyst Charles Clack said that global cotton demand decreased by approximately 13% year-on-year in 2019/20, and consumption levels are not expected to fully recover from the impact of the COVID-19 epidemic before 2021/22. The bank predicts that global cotton consumption will grow by 1.1% year-on-year until 2029/30, which is a welcome opportunity for Australian producers and exporters. He said analytical models show that Australia has the opportunity to increase cotton exports to more than 5 million bales in the next decade if production allows, and that Southeast Asia is an attractive market. “
Clack said that except for Australia, which is affected by drought, in the short term, all cotton exporting countries will have surplus stocks, which will keep global cotton prices at a low level until 2020/21 – it will take the next two years. It will take three years of global production decline to offset the 20% inventory increase in 2019/20.
Export Opportunities and Challenges
Textile mills in Vietnam, Bangladesh and Indonesia will consume the most cotton in the future. Strong, Southeast Asia is expected to account for 55% of global demand growth over the next 10 years, which means there will be an additional 7.5 million bales of export opportunities.
However, as Brazilian cotton production continues to grow, it is expected that by 2028 / will reach more than 18 million bales in 2029, Clack said Brazil will account for the “largest share” of the region’s growing import demand. Australia will face fierce competition from Brazil, India and the United States. The United States will remain the world’s number one A large cotton exporter, but is expected to lose some market share due to the relative competitiveness of other countries.
Clack said that despite fierce competition, analytical modeling showed that Australia’s export market share could increase by 2 percentage points. , reaching 10% in the next 10 years, promoting its annual exports to nearly 5.3 million bales. Australian cotton mainly relies on irrigation to strengthen its position in the global export field. Unlike rain-fed irrigation in India and Brazil, it ensures the continued and reliable performance of Australian cotton. of high quality.
Clack said Australia will also benefit from its close trading relationships with Southeast Asian countries, and Australia’s geographical location is beneficial to both suppliers and buyers. Australia’s changeable weather and lack of rainfall Demand will continue to be a challenge, highlighted by the recent drought. Clack said political and social pressures could also seriously affect Australia’s future productivity.
Australian cotton production prospects
To take advantage of growing global demand and meet export opportunities of 5.3 million bales by 2029/30, Clack said Australian production will need to increase. Looking ahead to 2029/30, cotton will remain the key player in South Murray Darling Basin agriculture An important part of the system, Australian cotton production capacity is expected to exceed 1 million bales during periods of abundant water resources. However, structural expansion in the region is limited and cotton’s margins will need to be more convincing than other summer crops to expand seasonally. Planted area.
Northern Cotton Region
Reports show that northern Australia’s latitudes are similar to Brazil’s rapidly expanding Mato Grosso cotton region, which could reshape future cotton production. Domestic production potential. Clack said areas around Broome and Kununurra in Western Australia, Douglas Daly and Katherine in the Northern Territory, and Georgetown in Queensland were all touted as future irrigation industries, with water a key attraction. To gain access Specialized cotton equipment, machinery, inputs and talents, as well as high capital entry thresholds for the cotton industry, coupled with the distance from regional agricultural service centers, are all challenges faced by growing cotton in the north. </p
