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Australian cotton production hit by severe drought

Australia’s cotton production which suffered a sharp drop in the last season, is expected to shrink further in the new season. These reports come at a time when the overall demand-supply position of cotton in the world is expected to be tight, mainly because of the lower crop in the US as also some other areas and the expected increase in consumption. Australia, otherwise, is a an important cotton exporting country as its internal consumption of this fibre is very limited.

Cotton production in Australia is estimated to have fallen in 2003 by nearly 50 per cent to 3,68,000 tonnes from 7,65,000 tonnes in the previous year. The area under cotton has fallen sharply to about 2,20,000 hectare mainly because of lack of irrigation water in view of severe drought conditions in the cotton growing areas.

In view of the decline in production during the last year, productivity also came down to 1,673 kg per hectare from 1,731 kg in 2001-02. It may come down further in the new season. The yield is thus down by nearly three per cent.

Some preliminary reports indicate that cotton production in Australia might go down as low as 2,50,000 tonnes in 2004.

Australia grows its cotton mainly in New South Wales and Queensland. The main factor that is expected to bring down production in the coming year, is the continuing drought and lack of water for the purpose of irrigation. some members of Australia’s Cotton Industry Council’s Raw Cotton Marketing Advisory committee, still think that even with minor improvement in the cotton supply position, the next crop can improve the last year’s level of 3,68,000 tonnes. Most observers, however, think that the new crop would be substantially lower.

Though Australia has been able to establish world records in cotton productivity and is also taking some determined steps to promote the use of cotton, its own domestic consumption remains very small at 25,000 tonnes, mainly because of its small textile industry.

Thus Australia depends heavily on exports of its surplus cotton. Sometimes these exports are as high as 95 per cent of the crop. In 2002-03, it exported nearly 5,95,402 tonnes of cotton valued at A$ 1,155 million. Compared with the previous year, this showed a decline of about 16 per cent in volume from the previous season. Its main export markets for cotton are Japan, South Korea, Indonesia and Thailand. Some quantity seems to be coming to India as well. Buyers of Australian cotton will have to turn to other suppliers in 2004 and that too at a time when the global demand supply position of cotton is expected to be very tight.

The majority of Australia’s cotton growing regions remain drought affected, putting the spotlight in the sensitive issue of water supply. As the world’s second driest continent has to use its limited water resources wisely, it is currently undergoing a process of water reform. Under Australia’s federal system of government, responsibility for natural resource management rests with the states, but all governments including the Commonwealth government recognise the need for a better coordinated national water plan.

The Australian cotton growing industry has been trying to use water as efficiently as possible by appropriate use of technology for the purpose. In fact, Queensland cotton growers have achieved almost 13 per cent water use efficiency gains over the last two seasons. Cotton Australia has continued to provide significant resources in liaising the governments over water use issues, particularly the right for cotton growers to have access rights to water for the long term in New South Wales and Queensland. In addition to these natural resource issues, attention is also being paid to the issue of chemical regulations, biotechnology, transport and rural infrastructure.

So far as marketing of cotton is concerned, a number of organisations including cotton growers cooperative, private companies and subsidiaries of international companies actively participate in the marketing of Australian cotton. There is no government intervention either in domestic marketing or exports of Australia cotton. A non statutory body, the Raw Cotton Marketing Advisory Committee acting as a sub committee of the Australian Cotton Industry Council facilitates the exchange of information between the Commonwealth government and various sectors of the industry on the marketing of cotton.

There is no government price support nor any other form of assistance, specific to cotton growing (making Australian cotton growers most efficient in the world), ginning or marketing, other than in the form of contribution to research and development. There is active competition among ginners for seed cotton and amongst merchants for raw cotton, thus providing growers with a choice of ginning and or selling arrangements. The Commonwealth government contributes to research and development through the Cotton Research and Development Corporation (CRDC) which is funded by the cotton industry by way of a levy paid by all farmers at the rate of A$ 2.25 per 227 kg. The Commonwealth government matches the contribution on a dollar to dollar basis up to the maximum of 0.5 per cent of the gross value of production. During 2002-03, the CRDC invested A$ 14.2 million directly into research grant expenditure. The industry has also set up Cotton Australia to promote the interests of the Australia cotton industry in the country and worldwide.

- M D Dewani