February 7, 2012 / 6:05 AM / 8 years ago

Australia floods fail to dampen big cotton crop

SYDNEY (Reuters) - Australia’s projections for a bumper cotton crop remain on track despite a week-long deluge in major growing regions that forced thousands of residents from their homes and left rivers dangerously swollen.

Floodwaters lap at the first floor of a home near Charleville, about 685 km (426 miles) west of Brisbane February 6, 2012. REUTERS/Queensland Police Service/Handout

Australia is the world’s third-largest cotton and sugar exporter, fourth-largest wheat exporter and a big supplier of other agricultural and mineral commodities. Heavy rains a year ago contributed to one of Australia’s biggest slumps in GDP in 20 years over the first quarter.

Eastern Australian agricultural belts have been inundated with flood rains for the second year running, with at least two more months of the summer wet season to go.

In some instances, police and emergency workers have been given extra powers, including the use of reasonable force, to make people abandon their homes and farms.

Industry body Cotton Australia said it still expected a record national cotton harvest of 5 million bales this year, far outpacing last year’s record 4 million bales.

“There will be damage, but cotton crops are fairly resistant and we’re still expecting around 5 million bales,” the group’s national director of communications, David Bone, said.

He added that it was too early to fully assess any damage to cotton crops due to continued flooding in some areas and it would take about a week from when rains fully subside before a thorough measure of the crop could be conducted.

In Australia, one bale equals 500 pounds. Bale weights vary in other cotton-producing countries due to differing moisture content when cotton is compressed.

New York cotton futures settled lower in the last session, awaiting release of the U.S. Agriculture Department’s monthly supply/demand report on Thursday.

Benchmark March cotton on ICE Futures U.S. slipped 0.03 cent to finish at 96.31 cents per lb.


Queensland’s Balonne River is expected to peak later on Tuesday at around 14 metres (46 feet), which remains just below the highest of the levees protecting the cotton-growing town of St George, according to weather forecasters.

St. George was also hit in 2011, when flash floods in the region killed about 35 people, swamped 30,000 houses, and wiped out roads, bridges and rail lines.

Farm investment group PrimeAG Australia said due to the rains, it now held ample water supply for planned fiscal 2013 irrigated crops at most of its locations, along with sufficient water to irrigate some of its projected fiscal 2014 crops.

“Our dryland cotton has benefited from the recent rain and has the potential to perform well against forecast production,” Chief Executive Peter Corish said.

“We would now like to see a period of sunny, hot weather as harvest approaches.”

Australia’s cotton farmers plant from late September to early November and usually finish harvesting at the end of June.


Corish said only around 5 percent of the irrigated cotton crop was reaching maturity when the recent rain commenced, lessening the likelihood of major quality downgrades.

Floodwaters in parts of eastern Australia were showing signs of receding on Tuesday, though high water levels and moving floodwaters remained a danger, according to the Australian Bureau of Meteorology.

The worst of a week-long deluge that dumped more than 200 mm (7.9 inches) of rain in northern New South Wales and southern Queensland states had passed, but the danger of rising river waters remained, the bureau said.

Floodwaters divided the town of Moree in two last week and the cattle-raising town of Mitchell was now assessing damage after it was also flooded.

“They literally went to bed and the water wasn’t near the house, and they woke up and it was through the roof,” said Senator Barnaby Joyce, a member of Australia’s National party.

At nearby Roma, also an agricultural hub, about 380 homes have suffered some form of damage.

Australia’s coal industry, which is concentrated in Queensland and New South Wales, was largely unaffected, easing concerns of a repeat of last year’s disastrous floods that sent global coal prices soaring.

Last week, Whitehaven Coal said it had shut four mines because of heavy rain, but the mines were not flooded and no equipment had been damaged. [ID:nL4E8D326J]

Australia, one of the world’s largest coal exporters, accounts for about two-thirds of the global coking coal trade, with around 90 percent of that coming from Queensland state.

Sector heavyweights Rio Tinto, BHP Billiton and Xstrata are among major companies mining coal in Australia.

Credit Suisse analyst Paul McTaggart said many coal pits in Queensland were still partially waterlogged last year’s flooding.

“It would not take a great deal of rain to hamper production and rail transport again,” he said.

The prospect of more rain posed more of a threat to coal production than a looming labor strike at some of the country’s biggest collieries, according to McTaggart.

Talks between union workers and the BHP Billiton-Mistusbishi coal mining alliance remain deadlocked after 15 months, with unions threatening more rolling work stoppages.

Of a total workforce of about 10,000, around 3,500 workers belong to unions at the mines.

Sugar cane farms in Queensland, hit hard by last year’s floods, were largely spared by the most recent rains, said Suzi Moore, a spokeswoman for the industry body Canegrowers.

However, some canefields in New South Wales, which makes up about 5 percent of the national yield, suffered some damage, she said.

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