Cotton Growing in Australia Industry Market Research Report Now Updated by IBISWorld

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Trading conditions for Australian growers have fluctuated over the past five years due to increased volatility on the global cotton market. For this reason, industry research firm IBISWorld has updated its report on the Cotton Growing industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

Drought and severe water shortages, followed by flooding and high rainfall, have affected industry revenue.

The fortunes of operators in the Cotton Growing industry in Australia are largely determined by external factors such as global cotton demand, the world price of cotton and domestic growing conditions. According to IBISWorld industry analyst Ryan Kerin, “although Australia is a small cotton producer on a global scale, the industry is reliant on exports through downstream industries”. Over 80% of ginned cotton is sold abroad due to the small size of domestic textile manufacturing industries, and the increasing penetration of fabric and garment imports. Other cotton products, such as cottonseeds, are used by food manufacturers and within the industry to grow new crops.

Trading conditions for Australian growers have fluctuated over the past five years due to increased volatility on the global cotton market. “There have been steep declines in global cotton stocks and erratic swings in prices,” says Kerin. Prolonged drought conditions and severe water shortages, followed by some flooding and beneficial high rainfall levels, have also affected revenue. These factors pushed up the cost of growing cotton and forced smaller, less-viable operators out of the industry. The industry underwent a brief period of resurgence between 2010-11 and 2011-12 as global cotton prices spiked. This spike was short lived, and falling prices and a smaller area sown in cotton is expected to result in industry revenue declining 47.3% to $874.8 million during 2014-15. The industry displays a low level of market share concentration. Major companies include Cubbie Group Limited.

Annualised revenue growth is expected to be 1.4% over the five years through 2014-15. As farmers increased plantings around the world in response to high prices, global production increased, causing world prices to then tumble. However, this has been offset by higher domestic production volumes. Australian cotton producers are expected to enjoy better trading conditions over the five years through 2019-20 as global cotton prices halt their current slide and the total area of cotton farmed increases from the current slump. A projected fall in the Australian dollar will also help the Cotton Growing industry. Increasing global demand from developing countries is likely to sustain demand for the industry.

For more information, visit IBISWorld’s Cotton Growing industry in Australia report page.

Farms in this industry grow cotton. Cotton is the white downy fibres grown on shrubby plants of the genus gossypium. These fibres are used to make textiles and other products.

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IBISWorld industry Report Key Topics

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
IBISWorld
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