According to data released by the Australian Bureau of Agricultural Resources Economics and Sciences (ABARES), Australia’s cotton planting area is expected to be 684,000 hectares in 2022/23. Among them, the planting area of irrigated cotton areas has declined due to excessive rainfall, and the area of dryland has increased. However, since the yield of dryland cotton fields is not as good as that of irrigated cotton fields, the total output is expected to be about 1.15 million tons, a decrease of about 6% year-on-year, and still at a high level, higher than the previous estimate of 5 million bales (equivalent to about 1.135 million tons) by the Australian Cotton Association, but lower The U.S. Agricultural Counselor estimated 6 million bales.
The latest monthly report from the U.S. Department of Agriculture shows that Australia’s cotton production in 2022/23 is 1.197 million tons (a one-time increase of 108,000 tons from the February report). Although it is lower than the U.S. Agricultural Counselor, it is significantly higher than the predictions of relevant Australian agencies.
From the perspective of customs statistics, although China’s single-month imports of Australian cotton accounted for the proportion of total cotton imports in that month gradually increased from 1% to 4% (February 2023) since 2022/23, due to my country’s cotton imports from January to February The total volume decreased by 45.5% year-on-year. Therefore, although the proportion of Australian cotton imports increased, the quantity decreased. Some institutions, cotton traders and cotton textile companies have judged that although Australia’s total cotton output in 2022/23 is still very promising, the following factors will make it difficult for Australian cotton to export to the Chinese market. There is still a long way to go to achieve success in 2019.
First, demand growth is not smooth. Affected by the slow recovery of the global economy, high inflationary pressure and the continued interest rate hikes by the Federal Reserve, coupled with the continued destocking of textile and clothing buyers in Europe and the United States and the pressure from the Xinjiang cotton import ban, high-cost, high-value-added and high-profit export orders are relatively Scarce, Chinese companies’ demand for high-quality and high-index Australian cotton is constrained;
Second, the quotation of Australian cotton is on the high side, and the price-performance ratio has declined in the early stage. Judging from the quotations from international cotton merchants and trading companies, the basis difference of Australian cotton SM 1-5/32 (strong 29GPT) for the June/July/September shipping date is stable at 15.5-16 cents/pound (2305+basis). In the same shipping period, the basis difference of U.S. cotton EM M 1-5/32 is 14.75-15 cents/pound; due to the small number of traceable orders and the majority of short orders and loose orders, U.S. cotton/Brazilian cotton is more substitutable for high-index Australian cotton. powerful;
Third, since the beginning of this year, China-Australia relations have shown clear signs of recovery. High-level exchanges between the two sides have been frequent, and economic and trade exchanges have gradually returned to normal. However, as Australian Prime Minister Albanese approved the ban on TikTok, the relationship with other members of the “Five Eyes Alliance” has remained unchanged. In agreement, Australia’s so-called “highly attaches great importance to developing economic and trade relations with China and treats enterprises from all countries, including China, equally” may lack integrity. Therefore, Australia insists on following the footsteps of the United States, Britain and other countries to contain China, and it is difficult for China-Australia relations to truly pick up.