In anticipation of a slowdown in the demand for its textiles in major markets such as the US and Europe, Indonesia is expected to cut its global cotton imports by 3.5 per cent in the year to 31 July 2002.

According to a report from the US Department of Agriculture, Indonesia will cut total cotton imports to 2.53 million bales from 2.62 million bales.

Although Indonesia is the world's largest cotton importer, it is estimated that members of the Indonesian Textile Association have cut production by as much as half since the 11 September terrorist attacks on the US.

Australia supplies around half of the country's needs, shipping around 25 per cent of its total cotton exports to Indonesia. Reduced demand could force large Australian producers to look for new markets in Asia and the Middle East.