The world cotton price is forecast to fall by 6 per cent in 2006-07 to average around US53c/lb, driven by increased production particularly in developing country producers such as India and Pakistan, Frank Drum, commodity analyst with ABARE, said at the OUTLOOK 2006 conference.

Increased cotton production in India and Pakistan reflects the recent rapid adoption of genetically modified cotton varieties which is driving significant improvements in yields. ‘This will place downward pressure on cotton prices over the medium term,’ Mr Drum said.

Mr Drum also highlighted the importance of water to future growth in cotton production in Australia. ‘The size of the increase in the area planted to cotton in Australia over the medium term will be largely dictated by the availability of water in key cotton growing regions’, he said.

Harvey Gaynor, General Manager of Auscott Limited’s Gwydir Valley Operations, also recognised the importance of efficient water use for the cotton industry’s future.

Mr Gaynor particularly focused on improvements in operational efficiency, such as the adoption of new irrigation technologies, precision farming and improvements in farm management practices which all have the potential to increase cotton yields with lower water usage.

‘Auscott Limited’s early trial results of overhead irrigation systems have shown a 20 to 40 per cent reduction in water usage,’ said Mr Gaynor.

Delegates also heard from Mr Jeff Bidstrup, a cotton and grain farmer from the Darling Downs in Queensland, who outlined the benefits associated with the use of GM cotton varieties in Australia, such as reduced application of chemicals.

Mr Bidstrup called on state governments to lift bans on genetically modified food crops. Mr Bidstrup claimed these bans disadvantage the Australian cotton industry because ‘they create uncertainty and serve as a disincentive for research and commercial investment in gene technology.’