Output 22 % yoy $1,288m est

Production up

22 % yoy

Yields up

45 % yoy
Prices up

Average domestic prices up this season

Domestic cotton production benefitted from improved growing conditions while a continued rise in cotton consumption pushed up average domestic prices this season. Global cotton prices and production also increased, with growing textile industries, consumption forecasts and improved access to China’s import markets all playing a part.

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DPI research protecting Australian cotton from Verticillium wilt

NSW DPI is helping cotton growers to manage risk associated with Verticillium wilt disease by developing a tool to determine the level of the fungal pathogen. Quantifying the inoculum levels in the soil allows cotton growers to make informed planting decisions to minimise the risk of yield losses associated with Verticillium wilt. When the right environmental conditions occur, the disease can reduce yields by 30-40%.

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International engagement branch

NSW DPI International Engagement Branch, with the Australian Cotton Shippers' Association, hosted a delegation from the China Cotton Textile Association at NSW Parliament House in April 2017. The delegation served to better understand the quality and marketing of Australian cotton and shared information on new quota volumes and quality specifications for Chinese cotton imports.


Production was up 22% year-on-year despite a 16% decrease in area planted. A 45% increase in yield driven by irrigated cotton yield offset the loss in area planted, with average yields of 9.95 bales per hectare1.

The increase in yield reflected a return to normal production levels as the absence of extreme weather conditions during this year’s harvest meant yield returned to within 1% of the five-year moving average1.


Global consumption fell to parity with production for the first time since 2014–15 and total global closing stocks remained stable year-on-year96. Domestic prices remained steady year-on-year at a historically high $582/bale, with strong demands from traditional export markets2.

The global Cotlook A index rose 6% with the increase driven by strong global demand for cotton and projections that global consumption will continue to grow faster than production for the near future2, 73.

Global Supply and Demand

China Ending Stocks
World (Less China) Ending Stocks
Global production
Global consumption


NSW export data for 2017–18 is not available because of confidentiality restrictions17, u. From a national perspective however, China remains one of Australia’s biggest markets (the majority of the export market share for ‘unidentified country’ in the chart below is assumed to be attributable to China).  Over much of 2011 to 2014, China was procuring cotton to hold in reserve. With this reserve being liquidated and its domestic crop production down, China has been more active in the market79.

Bangladesh is close on the heels of China in terms of volume, and India has recently become a consistent purchaser. The Vietnamese market has increased consistently over the past five years, due largely to the increase of Chinese-owned mills operating in Vietnam. As the cost of production increases in China, mill owners will look for more cost-effective production and in Vietnam, cotton can be spun at a cheaper rate than China79.

Australian Cotton Export Market Share

Source: GTA (2018)

Macroeconomic Conditions

Synthetic fibres (polyester in particular) still dominate the textile market in terms of worldwide usage but rising crude oil prices and environmental concerns support cotton production and prices2. Cotton also benefits from increased middle class populations able to afford more expensive natural fibres2.

Trade tensions between the US and China have caused uncertainty, with China imposing 25% tariffs on many US agricultural products, including cotton, from July 2018. With stockpiles down, China has also increased cotton import quotas for 2018 to allow more overseas purchases87, 88.

Cotton vs Synthetic Fibres Index

Cotlook 'A'
Synthetic Fibers Producer Price Index
Source: NCCA (2018)