Cotton production in Australia, the world’s third-biggest shipper, may drop as much as 8.2 percent as farms are inundated in the nation’s east, harming crops and curbing output, according to a producers’ group.
Output may be 4.5 million bales to 4.6 million bales, said Cotton Australia Chief Executive Officer Adam Kay. That compares with a prior estimate of about 4.9 million bales, he said.
Flooding in Queensland and the neighboring state of New South Wales may have caused A$50 million ($54 million) of damage, the federal government said last week. A reduced cotton harvest may curb global supplies, helping boost prices that tumbled 37 percent last year. Output may surge 25 percent to a record 5 million bales after floods last year boosted water supplies and spurred plantings, the group said in November.
“We’re seeing about 400,000 bales lost,” Kay said by phone from Sydney today, adding there could be more damage as floodwaters move downstream. “We’re really just after warm, dry conditions to help the crop that’s left.”
About 20,000 hectares (49,421 acres) of irrigated cotton and 20,000 hectares of dryland crops have been lost due to the flooding, he said. The deluge may damage as much as 10 percent of the cotton crop, Olam International Ltd. said on Feb. 6.
Cotton for March delivery gained 0.4 percent to 94 cents a pound on ICE Futures U.S. in New York at 3:35 p.m. in Singapore. Prices have advanced 2.4 percent this year. The harvest in Australia begins about March.