growers@sgcotton.com.au Roger Tomkins - Greenmount Press

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Editorial… David Dowling, Editor
As expected, the 2012 Cotton Conference was huge, with
a great feeling of optimism evident over the three days. Of
course, the mood would have been better if the cotton price
had a 5 in front of it rather than a 3. Nevertheless, there is still
a long time to get a decent selling opportunity between now
and the end of the season.
After a record crop the previous year, the season just gone will undoubtedly
be another record. But we may have to wait for quite a while to get an
accurate handle on what looks to be close to a five million bale crop. Of
course, the season was late and the ginning capacity was always going to be
stretched. A lower price is likely to see the crop fall back to a more manageable
four million bales or so next season, which could ease some of the logistical
problems.
There are plenty of reasons for the dramatic fall in the cotton price earlier
this year, and most experts can explain them after the event. Just as they could
explain the incredible high prices the previous year – after the event. But the
more I look at cotton and other commodity markets, the more convinced I am
that no-one has any real idea which way they will go or why. And if they did
know, they wouldn’t tell you anyway. Just like horse racing experts – if they
really knew which horse was going to win, they wouldn’t be telling anyone.
Apparently, part of the problem is that China has been stockpiling a huge
amount of cotton over the past few years for no apparent reason, and there
are some concerns that this may mean they will be reluctant to buy any more
for a while.
Nevertheless, China still seems to be buying cotton. Having just returned
from China, this inscrutable attitude to their cotton mountain was just one of
many things that didn’t make sense to an outsider.
Such as why they keep building huge numbers of apartment buildings while
many of the existing ones remain empty. And why they build six lane highways
which are often nearly deserted. And why the average life of one of those
apartment buildings is about 17 years – after which they knock them down to
build a bigger one.
I’m sure the reasons for all these things will become clear eventually. After
all, the Chinese seem to know what they are doing. Let’s hope so anyway.
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2 — The Australian Cottongrower August–September 2012