MELBOURNE: Australian cotton production is expected to plunge 62 percent to a 30-year low this season because of drought, Cotton Australia Ltd. said. Australia is the world's fifth-largest exporter of cotton.
The nation may produce 500,000 bales of cotton from the crop now being planted, that compares with last year's 1.3 million bales and a previous forecast of 700,000 bales for this year's crop.
Australia's cotton production has fallen five of the past six years as prolonged drought dried up rivers and dams, reducing irrigation supplies.
There are no areas in good shape so people aren't prepared to take big gambles these days so where they haven't got the water they haven't planted.
Cotton prices have gained 29 percent in the past year as farmers in the U.S., the world's largest exporter of the fiber, shift to other crops including corn, seeking better returns.
The biggest challenge for growers will be keeping infrastructure up-to-date and continuing to invest. The U.S. is forecast to be the world's largest exporter of the fiber in 2007-08, followed by India, Uzbekistan, Brazil and Australia, according to the U.S. Department of Agriculture.