From Cotton Communications

Australian growers have pulled out all stops to plant cotton, with predictions for 2003-04 production rising to 1.5 million bales.

"Growers are making every effort to get crop in the ground on the basis of recent rains, including replanting fields that have been hailed out," Gordon Cherry, acting chairman of the Australian Cotton Shippers Association, said today.

But water storage levels remain low and some estimates have the 2003-04 crop as low as 700,000 bales.

Many crops may finish only with the benefit of rain. The latest advice on the Southern Oscillation Index by forecaster David McRae of the Queensland Centre for Climate Applications, shows there is only a 40-50% chance of above median falls in Queensland and NSW until December.

Growers appear willing to risk planting later than normal, including the implications for fibre quality, thanks to buoyant prices.

Mr Cherry estimates planting equivalent to 1.25 million bales to date, edging towards 1.5 million by the close in November. This would equate to 203,000 hectares at a yield of 7.39 bales per hectare.

It compares with production of 1.63 million bales in 2002-03.

China remains a main focus of cotton merchants, following news of yield and quality problems in the Chinese crop. This could provide an opening for Chinese purchases of high-grade cottons, where it would normally be able to meet all its needs with domestic high grades.

"Price-wise it would be hard for us to compete in a normal Chinese season on a landed basis in China, but this year Australia may find some call to supply high grades," Mr Cherry said.

China is looming as the main market for raw cotton exports and merchants were encouraged by recent signals from Beijing and Canberra of closer trade ties and the possibility -- a long way off -- of a China-Australia free trade agreement.

The recent signing of a free-trade agreement between Australia and Thailand should only strengthen existing ties, after sales of 400,000 bales to Thailand in 2002 ranked it as Australia's fourth largest export market.

Sales to Australia's largest buyer of raw cotton, Indonesia, ran to 854,000 bales in 2002, according to the 2003 edition of the Australian Cotton Yearbook. Sales to China last year reached only 58,000 bales.