Australia, faced with worsening drought, has been forced to more than halve its cotton production area.

The Australian Bureau of Agricultural and Resource Economics said that the country's estimated 143,000 hectares sown to cotton in 2006-07 is 57% below that planted in 2005-06, and the smallest area since 1983-84.

Production of cotton lint is expected to be down 58% for the period, to around 250,000 tonnes, the bureau said.

The very dry spring and lack of irrigation water in Australia, the world's fourth largest cotton producing nation, caused total summer crop areas to be cut by half in 2006-07, to 743,000 hectares.

In addition, the country's total summer crop production is forecast to fall by nearly 60% in 2006-07 as most of the main growing areas in southern Queensland, northern New South Wales and the Riverina remain in the grip of drought.