Jan. 7 (Bloomberg) -- Cotton crops damaged by flooding in Australia, the fourth-largest exporter, may partly recover in the next few months helping to maintain the production outlook, Australia & New Zealand Banking Group Ltd. said today.
The bank was leaving unchanged a forecast of 4.5 million to 4.6 million bales, even as the floods may have damaged or washed out 10 percent to 15 percent of the Queensland crop, ANZ Agricultural Economist Paul Deane said by phone today. Australian bales weigh 227 kilograms (500 pounds).
Flooding in Queensland, after record December rainfall, has affected about 1 million square kilometers, or an area the size of France and Germany. The rain halted coal shipments, cut roads and railways and inundated grain, sugar and cotton crops.
“January and February are going to be key months to see how some of these flooded areas recover,” Deane said. Warm, sunny weather could allow cotton crops that were not washed away to come close to yield potential, while non-irrigated areas in New South Wales may have benefitted from rain, he said.
Cotton for March delivery declined 0.2 percent to $1.4090 a pound on ICE Futures U.S. in New York at 5:05 p.m. in Melbourne. The most-active contract touched a record $1.5912 on Dec. 21.
About 7,500 hectares (18,533 acres) at Theodore in Queensland had been destroyed by floods, industry-group Cotton Australia said this week.
Damage at areas including Emerald, Dalby and Toowooomba is still being assessed, David Bone, communications manager at the Sydney-based group, said today. Crops near St George may also be a risk as river levels rise ahead of an expected weekend peak.
National production this season may reach a record 4.2 million bales from 665,000 hectares planted, the group forecast on Dec. 8.
Output may gain to 894,000 metric tons (3.9 million bales) this season compared with 387,000 tons last year, the Australian Bureau of Agricultural and Resource Economics and Sciences said in a report Dec. 7. Queensland accounted for 41 percent of the planted area, it estimated.
Anecdotal reports suggested output between a 3.5 million-bale record in 2001 and a December industry forecast of 4.4 million bales, Commonwealth Bank of Australia said in a report on Jan. 5.
“A 4 million-bale-plus crop now would be probably viewed as being on the optimistic side,” said Luke Mathews, an agricultural commodities strategist at the bank.
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