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Australia lifts crop forecasts for cotton, and high-priced sorghum

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Australia’s cotton output will, thanks to rains, recover more strongly than had been thought, officials said - nudging higher their forecast for sorghum production too, encouraged by prices which topped Aus$1,200 per tonne.

 

Abares, the official Australian commodities bureau, upgraded by 72,000 tonnes to 456,000 tonnes (2.1m bales) its forecast for the country’s cotton lint output in 2020-21.

 

The upgrade took the figure more than three times above the 134,000 tonnes produced in 2019-20, an 11-year low, when longstanding drought meant even some crops in so-called irrigated areas went short of moisture.

 

And it represents the return of rains to many drought-hit areas – notably to New South Wales, Australia’s top cotton-growing state.

 

‘Significant increase in water supply’

 

Besides the rains that have already fallen, “favourable climatic conditions during spring are expected to… provide a good foundation for summer crops”, Abares said, foreseeing a quadrupling, to 239,000 hectares, in area.

 

“Area planted to irrigated cotton is forecast to rise due to a significant increase in the supply of irrigation water.

 

“Area planted to dryland cotton is forecast to increase significantly to 66,000 hectares, which reflects the favourable outlook for seasonal conditions in spring.”

 

Even so, area planted to the fibre, demand for which has been badly affected by the Covid-19 pandemic, would remain behind the five-year average of some 380,000 hectares to 2018-19 – ie before last season’s dismal result.

 

‘Availability of fallow land’

For sorghum, Abares nudged higher its 2020-21 output forecast too, to a five-year high of 1.73m tonnes, albeit only 10,000 tonnes above the previous estimate, made in June.

 

The upgrade reflected a 17,000-hectare increase to 595,000 hectares in area, the largest in six years.

 

“This forecast increase reflects the favourable outlook for seasonal conditions during spring, favourable grain sorghum prices and the availability of fallow land in summer cropping regions,” the bureau said.

 

Queensland, the top sorghum-growing state, had been left with substantial area for sorghum after being one area which largely missed out on early-2010 rainfall, meaning “unfavourable planting conditions for winter crops”.

 

Soaring prices

Abares reported that Australian sorghum export prices had, thanks to the short 2019-20 harvest, soared to average Aus$1,279 per tonne in the January-to-March period, although with improved output prospects ahead had fallen back to Aus$449 per tonne in the second quarter.

 

At current exchange rates, the first quarter high equates to about $930 per tonne, or $23.50 per bushel.

 

The lack of Australian supplies has driven key export customer China to source more of its sorghum from Argentina and, in the main, the US.

 

Official data show that, with four days of the 2019-20 marketing year to go, the US had exported 3.93m tonnes of sorghum to China, up from 600,900 tonnes year before.

 

For 2020-21, the US already had 1.33m tonnes of sorghum sales to China booked, with a further 919,000 tonnes to “unknown” of which at least a part was suspected to end up on that route.

 

A year before, the US had yet to book any forward sorghum sales to China, and had a total of 10,300 tonnes of forward bookings on all routes.

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