Cotton production set to double

Cotton production is expected to double this year, amid higher prices due to a weaker rand.

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Hennie Bruwer, CEO of Cotton SA, said production prospects for the current planting season remained favourable. “There is renewed interest in cotton production due to the improvement in cotton prices, which is mainly a result of the weakening rand over the past few months, as cotton is a dollar based commodity,” Bruwer said. Monsanto, the biggest supplier of cotton seed in SA, also stated that it expected an increase in production.

Gert Heyns, Monsanto’s marketing manager of seed in Sub-Saharan Africa, said that the irrigation areas in the Northern Cape and Loskop area in Mpumalanga should increase plantings, while other cotton regions were expected to stay the same. The previous production season saw a 53% decrease in plantings, and a 47% decrease in production from 59 000 bales of around 217kg each to 31 000 bales, mainly due to lower prices and the more favourable prospects for other competing summer crops.

Bruwer said that international prices had so far remained relatively high, despite the fact that 2013/2014 was the fourth consecutive season in which production exceeded consumption, causing the doubling of world stocks in four seasons. This is expected to reach a record level of about 20 million tons by July 2014.

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Bruwer, however, warned of China’s influence on the market. “China has followed a policy of building its national cotton reserve with the result that only about six million tons of the 20 million will be held outside China. This tightening of cotton stocks outside China has thus far supported international prices, but industry experts are in agreement that the current policy of accumulating stocks cannot continue indefinitely. This is expected to have a negative effect on world prices,” Bruwer said.

Cotton SA and the SA Cotton Producers’ Organisation were in the process of creating initiatives to revive the industry. Bruwer said in order for the industry to flourish, more commitment from government was needed to stimulate smallholder farmer production and former irrigation schemes.

“A lower technology fee for biotech seed is also needed. Instead of a fixed technology fee per bag, the payment of a technology fee based on a farmer’s actual yield after harvesting would be a more equitable way of applying this fee.”