Cotton; organic farming sectors tipped to soar in 2016

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Cotton growers and organic farmers can look forward to a great year ahead, with industry market research expert IBISWorld predicting both sectors to boom in the new year.

Cotton; organic farming sectors tipped to soar in 2016
Cotton tops IBISWorld's list of top 5 growth industries in 2016.

The cotton industry is expected to fetch $879 million in revenue this year, up 19.2 per cent from last period; topping IBISWorld’s list of growth industries for 2016.

This is welcome news for growers as the sector suffered a poor year before; when revenue fell by 62.7 per cent.

A marginal increase in global cotton prices coupled with increased cotton production is expected to contribute to the revenue growth.

Additionally, the area of land available for cotton harvesting is anticipated to increase by 52.3 per cent and lint production to go up by almost 11 per cent.

According to IBISWorld senior industry analyst Spencer Little, the cotton growing industry is highly volatile, with revenue movements ranging between 136.1 per cent growth and 62.7 per cent decline over the past five years.

"The industry is affected by factors such as global cotton pricing and weather, which dictate farmers’ decisions to grow cotton or a different crop," he says.

"Growing conditions are expected to be far more favourable in 2015-2016, as the industry recovers from a woeful performance in 2014-15."

Organic farming sits on the third spot on the list, with IBISWorld predicting a 5.6 per cent growth from last year to $733.8 million.

This comes as consumers are becoming more aware of the perceived health benefits and environmental effects of their food choices.

"The industry is expected to continue to grow strongly as organic consumption becomes more mainstream," Little says.

"The nation’s two major supermarkets, Woolworths and Coles, now stock greater amounts and wider ranges of organic produce, making the purchase of organic products more convenient."

According to IBISWorld, Australia has the largest area of organic farmland in the world, covering more than 22 million hectares. This is largely due to the vast amounts of land required for organic meat production, particularly beef.

"Beef has been a major growth product over the past five years for the industry," Little adds.

"Farmgate revenue for organic beef cattle increased by almost 127 per cent over the four years through 2013-14."

Other industries set to experience significant growth in the coming year include internet publishing and broadcasting; houseware retailing; and higher education.

IBISWorld has also predicted the less fortunate fates of five industries which revenues are set to fall this year.

These include the petroleum refining and manufacturing sector; diamond and gemstone mining; printing and nightclub industries. 

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