According to the Australian Bureau of Agricultural Resources Economics and Sciences (ABARES), in 2022/23 Australia’s cotton planting area is expected to be 684,000 hectares, of which the area planted in irrigated cotton areas has declined due to excessive rainfall, while the area of dryland has increased. However, since the yield of dryland cotton fields is not as good as that of irrigated cotton fields, the total output is expected to be about 1.15 million tons, a decrease of about 6% year-on-year, and still at a high level, higher than the previous estimate of 5 million bales (equivalent to about 1.135 million tons) by the Australian Cotton Association, but lower The U.S. Agricultural Counselor estimated 6 million bales.
The latest monthly report from the United States Department of Agriculture shows that in 2022/23 Australia’s cotton output was 1.197 million tons (a one-time increase of 108,000 tons from the February report). Although it was lower than the U.S. Agricultural Counselor, it was significantly higher than the predictions of relevant Australian agencies.
From the perspective of customs statistics, although China has In a single month, imports the proportion of Australian cotton in total cotton imports in that month gradually increased from 1% to 4% (February 2023). However, due to the Total cotton imports decreased by 45.5% year-on-year. Therefore, although the proportion of Australian cotton imports increased, the quantity decreased. Some institutions, cotton traders and cotton textile companies have judged that although the total Australian cotton output in 2022/23 is still very promising, the following factors will make Australian cotton It is difficult to make major achievements in the Chinese market Exports, and there is still a long way to go before we can restore the glory of previous years.
First, demand growth is not smooth. Affected by the slow recovery of the global economy, high inflationary pressure and the continued interest rate hikes by the Federal Reserve, coupled with the continued destocking of textile and clothing buyers in Europe and the United States and the pressure from the Xinjiang cotton import ban, high-cost, high-value-added and high-profit export orders are relatively Scarce, Chinese companies’ demand for high-quality and high-index Australian cotton is constrained;
Second, the quotation of Australian cotton is on the high side, and the price-performance ratio has declined in the early stage. Judging from the quotations from international cotton merchants and trading companies, the basis difference of Australian cotton SM 1-5/32 (strong 29GPT) for the June/July/September shipping date is stable at 15.5-16 cents/pound (2305+basis). In the same shipping period, the basis difference of U.S. cotton EM M 1-5/32 is 14.75-15 cents/pound; due to the small number of traceable orders and the majority of short orders and loose orders, U.S. cotton/Brazilian cotton is more substitutable for high-index Australian cotton. Strong;
Third, there are signs of warming in China-Australia relations since this year Obviously, high-level exchanges between the two sides have been frequent, and economic and trade exchanges have gradually returned to normal. However, as Australian Prime Minister Albanese approved the ban on TikTok, in line with other members of the “Five Eyes Alliance”, Australia’s so-called “high priority is to develop bilateral relations.” China’s economic and trade relations and equal treatment of enterprises from all countries, including China” may lack integrity. Therefore, Australia insists on following the footsteps of the United States, Britain and other countries to contain China, and it is difficult for China-Australia relations to truly pick up.