Australia, the world’s third-biggest cotton exporter, raised its forecast for shipments as production gains on increased availability of water for irrigation.
Exports may total 988,000 metric tons in the year starting July 1 from 924,000 estimated in March, the Australian Bureau of Agricultural and Resource Economics and Sciences said in a report today. The harvest is set to total 995,000 tons in 2013-2014 from 905,000 tons forecast in March, it said, reiterating a June 12 estimate.
“The forecast cotton production in 2013-14 is expected to be supported by plentiful supplies of irrigation water and favorable gross margins compared with alternative irrigated crops,” the report said.
While futures in New York tumbled 60 percent since reaching a record $2.197 a pound in March 2011, prices are up 17 percent this year as global production declines. The U.S. Department of Agriculture last week cut its forecast by 3.6 percent for the domestic crop in the year starting Aug. 1 because of drought in Texas. World output will be 117.2 million bales of 480 pounds (218 kilograms) each, down from 121 million bales, the USDA said.
Cotton for December delivery lost 1.3 percent to 87.84 cents a pound on ICE Futures U.S. at 9:21 a.m. Singapore time. Texas is the largest growing region in the U.S., the world’s biggest exporter.