Cotton prices will increase as consumer demand for cotton-based apparel grows says ABARES

Cotton prices will increase as consumer demand for cotton-based apparel grows says ABARES

Dry weather conditions are expected to impact wool and cotton output in Australia for the 2018-19 period, a report from the Australian government has revealed.

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) says it is expecting wool production during the 2018/19 season to total 385,000 tonnes, a fall of 8.9% on the previous year's 422,000 tonnes. 

It attributed the fall to a decline in the number of sheep shorn and the average cut per head – while local reports suggest it is the lowest output on record.

Wool exports for the 2018-2019 period are also expected to be lower at AU$4.01bn compared to $4.38bn for the year-ago period.

In addition, ABARES notes cotton production is likely to fall during the period, largely due to a decline in area planted as a result of significantly reduced water levels in irrigation dams and low levels of stored soil moisture.

Prices, however, are expected to increase 2% on the back of higher demand. ABARES says growth in demand for cotton-based apparel will drive exports up over the period to $2.65bn compared to $2.13bn a year earlier.

"Increased purchases of cotton-based textiles and clothing are expected to be driven by an expansion in the number of middle-class consumers in emerging economies. Concerns about the environmental impact of synthetics is also encouraging cotton use in textiles," reads the report.