Life after China: Cotton growers cash in when the price reaches decades high

When Australian cotton growers celebrated World Cotton Day this week, the value of their wares skyrocketed.

Cotton futures have risen more than 20 percent over the past fourteen days, reaching $ 1.13 dollars a pound this week – the highest level since 2011.

Cotton Australia’s CEO Adam Kay said growers had now resold about 50 per cent of next season’s crop, with some producers locking in prices at $ 670 per hectare. Balle.

“We see a situation where supply is less than demand – it’s really driving prices,” Kay said.

“The word on the street is that the Chinese crop may not be as good as they thought, the Indian crop may not be as good as hoped, and next season there is talk that the Brazilian crop may fall by 10 or 20 percent . ”

“It’s all factors driving the market at the moment.”

a graph showing the sharp rise in cotton futures.
Since a price crash in March 2020, the value of cotton has been rising.(

ABC landline

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TradingEconomics.com has reported that heavy rains threaten cotton crops in large U.S. growing regions such as Texas, and a pest called the pink worm “spreads rapidly across fields.”

Meanwhile, Kay said major seasonal conditions in Australia had the cotton industry on its way to producing around 4.5 million bales next season.

“We have a rare situation where we have huge water in [Murray-Darling] system, the large stock dams are full, allowing growers to safely resell at these unusual prices. “

Close-up of cotton freshly harvested in a round bale, stumps and seeds are visible.
Australia produced around 2.8 million bales of cotton by 2021. (

ABC Capricornia: Erin Semmler

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Twelve months after China’s soft ban

A few years ago, China bought about 70 percent of Australia’s cotton crop.

So in October 2020, the Chinese government began telling mills to stop buying Australian cotton or risk having their quotas cut.

Australian cotton sellers suddenly had to struggle to find new markets for their product.

“Everyone was nervous at first [of the soft ban]”Kay said.

“But the Australian cotton shippers have done a fantastic job of selling the crop to other markets and emerging markets.”

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Australian Cotton Shippers Association chairman Michael O’Rielley said the industry had worked hard to diversify the Australian cotton markets.

“Right now, Vietnam is our largest export market, followed by Indonesia, which currently has the biggest advantage,” he said.

“They are our nearest neighbor and we have short delivery times.”

Asked if China is expected to lift its ban soon, Adam Kay said the industry “did not hold its breath”.

“We would love to see China come in again; we know that the spinners who take our cotton are very disappointed that they cannot get hold of high quality Australian cotton.

“But at the end of the day, [the soft ban] coming from a higher level than them and we just hope it can turn around in the future. “

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