Favourable water levels and high cotton prices are expected to drive cotton production up over the next 12 months.
The National Australia Bank is forecasting a steady hold on the average return of $US1.00 per pound through the second half of 2011.
Despite significant losses in cotton farming reigons due to flooding, Cotton Australia has predicted that over 4.8 million bales of cotton will be produced over the next year.
Strong demand from China continues to aid industry growth, with recent price peaks spurring increased plantations in agricultural areas.
Cotton Australia CEO Adam Kay was pleased that many Australian farmers were hitting in on the growth period:
“Most of this season’s crop was in the ground before the price went through the roof...there are relatively positive price signals for next year,” Kay said.
Australia’s average yearly cotton production has risen from 9,000 bales to an average of three million bales a year since the 1960s, with the recent price peaks set to increase that figure again by up to 60 per cent.
As the world's third-largest cotton producer, around 98 per cent of Australia's cotton is exported globally every year, predominantly to Asia.