Positivity for cotton industry
AS THE region's cotton harvesting continues after what can only be explained as one of the longest seasons, the RaboBank says there's good reason for optimism.
The agricultural banking specialist's industry report, Australian Cotton Outlook - Three good reasons for optimism forecasts domestic prices to remain strong- above the $520 per bale mark through 2017/2018.
The report cites currency weakness, the premium for Australian cotton - due to its quality - and global economic recovery as the three factors underpinning the local sector's profitability in the near-term.
Report author, Rabobank commodity analyst Charles Clack said although an increased worldwide availability in cotton could place downward pressure on world prices, the Australian dollar will provide some offset.
"However, much will hinge on production prospects, with the current season throwing up many challenges and resulting in highly variable yields,” he said. The news comes as the Central Highlands' cotton season enters its final leg.
Cotton Australia Central Queensland manager Renee Anderson said the region's cotton season is three quarters of the way through.
"It's been a really good season for the majority of growers,” she said.
"The early picked growers had excellent yields and really good quality.
"The mid-planted crops are a bit of a mixed bag because we had some overcast, rainy, weather in the middle and there was quite a lot of heat stress on the November, early December, planted crops which have just been harvested.
"They did have fairly high insect pressure and heat stress during the start of the season.”
Ms Anderson said although yields won't be finalised until the end of the season, the late planted cotton crops are starting to come off now, with prices looking good.
"Prices are looking excellent at the moment, growers are really happy with current prices,” she said.
"Most growers have received a really good price for this seasons' cotton, well above $500, which is fabulous.
"We'd like to see $500 all the time, that's where you're making your money, above the $500 mark.”
Harvesting is expected to wrap-up in July.