Quality is the key for Australian cotton
07/04/2009
Australia’s cotton industry is betting on a high-quality crop this year to offset weaker demand, particularly in China.
Spinning mills in China have been the main customers for Australian cotton growers for some time.
Industry officials said on April 6 that early indications from the harvest, which is now under way, showed high crop quality, in terms of fibre length, strength and fineness.
More than half the expected crop of 1.4 million bales has been pre-sold to customers, including mills in China, but new customers will need to be found in countries such as South Korea, Japan and Thailand for the remainder.
Campbell Ball, marketing manager at Queensland Cotton, a unit of Singapore’s Olam International, told Reuters: “Australian cotton is very saleable in China but there’s been a significant cut-back as mills haven’t got the import quotas.”
Last year mills in China took 75% of the Australian cotton crop, which brought in just 600,000 bales because of drought.
Textile mills in China have been urging the central government in Beijing to issue more quotas for imports, but indications are that, instead, the state has been purchasing domestically grown cotton to support prices at a time of falling demand for the fibre.
Bob Bell, chief executive of the country’s largest cotton processor, Namoi Cotton Limited, said new varieties had produced high-quality cotton fibre, which he felt sure would be in demand in the high-end fashion apparel.
“The quality coming through is fine, which reflects substantial advances in varieties,” he said. “The thing that’s critical for us is quality, as around the world, whilst supplies are adequate, the top end of the market is typically under-supplied.”
He said Namoi expected to concentrate its marketing effort in China in the second half of the year as it was likely more import quotas would be released as domestic supplies tightened because of state purchases.
“People are expecting, in another month, further quotas to be released, and that’s where we see demand coming,” said Mr Bell.
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