The cotton crop in Australia, the world's fifth largest exporter, is likely to rise 14% in 2009-10 after good rains gave farmers the opportunity to plant more dry-land cotton. Cotton Australia expects around 1.6 million bales to be produced from the 2009-10 crop, up from 1.4 million bales the previous year, said Chief Executive, Adam Kay.

He said next year's harvest would still be less than half a normal size crop due to continuing water shortages in some cotton growing districts that remain impacted by an once-in-a-lifetime drought. Cotton Australia's forecast 2009-10 production is below a United States Department of Agriculture estimate of a 1.8 million bales harvest.

The USDA forecast Australia will export 1.65 million bales in 2009-10, up from an estimated 1.2 million bales in 2008-09 Cotton Australia estimates 185,000 hectares have been planted this year, comprising about 165,000 hectares of irrigated cotton with the remainder largely dry land crops in southern Queensland state.

Kay said the area planted was slightly largely than last year but drought remained an issue with a developing El Nino weather event that usually brings dry weather to eastern Australia, a potential threat. A recovery in cotton prices was helping the industry, although the Australian dollar rising to around 93 US cents from around 80 cents mid-year would put a dent in export income.

Cotton prices surged after the USDA cut its estimate of global 2009-10 production to 102.74 million bales from an November estimate of 103.78 million bales and raised its estimate of global consumption to 113.52 million bales from 112.6 million barrels.