World News

Goldman India CEO Tells Clients Liquidity is the ‘Biggest Theme’

Goldman Sachs Group Inc. is telling clients in India to fortify their balance sheets to prepare for the uncertainty brought by the coronavirus pandemic.

“Currently, liquidity is the biggest theme among Indian businesses, and we are advising our clients to raise capital,” Sonjoy Chatterjee, the bank’s chairman and chief executive officer for India, said in a phone interview.

The Wall Street bank has arranged some of India’s biggest equity offerings this year, according to data compiled by Bloomberg. The share sales include telecommunications carrier Bharti Airtel Ltd. as well as lender Kotak Mahindra Ltd., controlled by Asia’s richest banker Uday Kotak.

Some of those funds will be needed to outlast the inevitable downturn. The International Monetary Fund is forecasting that India’s economy will contract by 4.5% in the fiscal year through March 2021 as one of the world’s biggest and strictest lockdowns from the end of March takes its toll.

The longer-term question is how companies should think about investing for growth, when it returns.

The impact of the pandemic is pressuring India’s sprawling corporates to refine their priorities, Chatterjee said.

“Covid-19 is driving Indian conglomerate structures to optimize and monetize by identifying what is core and non-core,” he said.

In that light, Mukesh Ambani’s campaign to transform Reliance Industries Ltd. into a dominant player in e-commerce, with technical expertise from Facebook Inc. and $15.2 billion in external funding, arguably looks like the future.

“The biggest challenge is capital allocation, and hence, more than before, they may be willing to unlock value through partnerships,” he said.

The string of deals tied up by Ambani to sell stakes in Reliance’s digital unit accounts for almost 50% of global investments into telecom companies this year, according to data compiled by Bloomberg.

Private equity funds and strategic investors are keen to buy into India, specifically in sectors including consumer and technology, Chatterjee said.

A long-term shift is underway in the country toward emerging dominant “omnichannel” digital platforms, driving digital transactions and shifting consumer buying behavior online, he said.

“To emerge as the victor, technology companies will push to consolidate,” he said.

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China Oil Titans Plan Joint Crude Buying to Add Bargaining Power

China’s state-owned oil refining giants are in discussions to form a purchasing group to buy crude together, increasing their bargaining power and avoiding bidding wars.

Senior executives from China Petroleum & Chemical Corp., PetroChina Co., Cnooc Ltd. and Sinochem Group Co. are in advanced talks to iron out details of the plan, said people familiar with the initiative, who asked not to be identified as discussions are private and ongoing. The proposal has won the support of the Chinese central government and relevant industry watchdogs, the people said.

For a start, the group is set to collectively issue bids for certain Russian and African grades in the spot market, they said. While it’s unclear how the cooperation will evolve, the group represents refiners that import more than 5 million barrels of oil a day. That’s nearly a fifth of OPEC’s total output, which would make it the world’s largest crude buyer in theory. The initiative — first mooted in 2019 — gained traction this year as the coronavirus spurred historic output cuts by OPEC and its allies to regain control of the market.

The original epicenter of the pandemic, China was the first major economy to reopen and its consumption of transportation and industrial fuels is now almost back to pre-virus levels. The v-shaped recovery has in recent months prompted the country’s state-owned and independent refiners to snap up Russian and Brazilian crude in the spot market, pushing up prices.

The state-owned refiners may jointly bid for Russian ESPO cargoes as early as next month in a trial run, the people said. The group might expand to allow participation from non-state owned processors — including so-called teapots in Shandong province — in the future, they said.

Sinopec’s media office declined to comment on the matter when contacted on Friday, while PetroChina couldn’t immediately respond. Emails sent to CNOOC and Sinochem went unanswered, while nobody immediately responded to fax messages to China’s National Energy Administration and the National Development and Reform Commission.

Long-Term Purchases

Importers from China to the U.S. to Europe with long-term supply contracts with Saudi Arabia and other big producers have struggled this year to manage the amount of crude received each month amid fluctuating domestic demand, refining margins and swelling stockpiles.

Based on terms embedded in these contracts, buyers can inform sellers of their preferred volumes, loading dates and grades in a process known as nomination. Volumes can only be adjusted slightly from earlier-agreed liftings, and final decisions lie with the seller. Saudi Aramco, Iraq’s SOMO and Abu Dhabi’s Adnoc all sell their crude at official prices announced early each month.

Indian processors and ports went so far as to declare force majeure in attempts to back out of crude liftings after the world’s biggest lockdown slashed demand. More recently, buyers across China and India sought more crude from Saudi Arabia after it cut volumes in-line with a wider OPEC+ pledge.

By banding together, the Chinese group hopes to have a louder voice and bigger say in the volumes and prices for crude purchased, the people said.

Other Attempts

While it’s unclear if the Chinese oil-procurement group will live up to expectations, grievances have been building up for several years as the country plays an ever-expanding role in the Asian and international oil market. Several mega-refineries have opened in recent years, while Shandong teapots have become regular buyers of crude from everywhere from Brazil to Russia.

Unipec — the trading arm of Sinopec — in particular has been a persistent critic of Saudi Arabia’s crude sales and prices, as well as Asia’s passive role as a price taker. The company sought in 2018 to renegotiate its contractual volumes with Aramco, resulting in a spat.

If successful, the group will be the latest joint procurement initiative in China’s commodity sector. In 2003, top copper smelters including Jiangxi Copper Co., and Tongling Nonferrous Metals Group Co. formed the China Smelters Purchase Team that buys concentrate for member plants from foreign suppliers. The group, known as CSPT, now consists of more than 10 smelters across the country and accounts for more than 80% of Chinese copper concentrate imports.

— With assistance by Sarah Chen, and Evelyn Yu

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China threatened by US over new legislation aimed at ‘hurting’ Chinese companies

This has the potential to trip up businesses and investors at home as Chinese firms move to other countries for capital. The Holding Foreign Companies Accountable Act is the name of the bill and it aims to address the issue that US securities regulators have with Beijing. It’s been an ongoing feud for decades which has seen Beijing refuse to allow audit inspections of their companies.

If it becomes law, Chinese companies will be required to comply with the rules or face being delisted.

This would put US$1.3 trillion of US-listed Chinese firms, including behemoths Alibaba Group and Tencent, at risk of losing access to the world’s largest capital markets.

Policy watchers and investors, however, said domestic businesses and investment funds could become unintended victims if Chinese companies begin to leave the US as a result.

“While it is going to hurt China, is it going to hurt it enough for the government to agree to the changes? That is unclear,” said Anna Ashton, senior director of government affairs at the US-China Business Council.

It is yet “another instance among many [that] our approach against China wasn’t completely thought through”.

On May 20, the bill passed through the US Senate by unanimous vote, however, awaits a further vote in the House of Representatives.

Under the bill, failure to provide information for three straight years would lead to trading bans of the shares.


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For US fund managers who actively allocate capital at BlackRock, T Rowe Price and Vanguard it would mean losing easy access to companies in an economy that still grows at a faster rate than any other in the world.

This is even in spite of the fact the world is experiencing an economic slowdown due to the coronavirus pandemic.

Those fund managers are also active in collectively investing tens of billions of dollars in Chinese companies.

If Chinese companies start leaving US exchanges, shareholders would suffer as the evaporating trading volume would drag down stocks’ value.


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Disowning Chinese stocks is not an option.

Rory Green, China Economist at TS Lombard, a New York-based research firm says: “In the current market, with tech outperforming, it’s almost impossible for fund managers to match or outperform the MSCI China [Index] if they do not own companies like Alibaba, and to a lesser extent Baidu, NetEase and JD.”

According to the South China Morning Star: allocation to Chinese American Depositary Receipts (ADR) among active emerging markets funds increased 10 points from a year ago to 35 per cent in April.

However, these changes mean scrambling to maintain similar exposure to these companies as listings are removed or moved to different exchanges.

This is according to David Semple, a portfolio manager at US$1.9 billion VanEck EM Equity Strategy funds in New York.

Semple had 41 per cent of his funds’ portfolio in Chinese companies – including Alibaba and Tencent – as of May 31.

China has been the single largest country of exposure in his investments.

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NYC first responders sue ambulance operator for pay and work violations

Out-of-state EMTs and paramedics who risked their lives to help New Yorkers during the coronavirus crisis say the FEMA subcontractor that hired them controlled every second of their deployment, including their sex lives — and then refused to pay them for all of their time.

According to a stunning lawsuit filed in Brooklyn state court, private ambulance operator Ambulnz promised the group of first responders it recruited back in March it “would be paid for 24-hours a day, 7-days a week” for deploying to the city as the COVID-19 cases began skyrocketing.

But Ambulnz went back on its word after the recruits arrived, including by refusing to pay people for the time it took to drive their ambulances to NYC, according to the suit.

Once in the Big Apple, Ambulnz told the recruits “to remain in their hotel rooms at all times when not on shift,” the lawsuit said, and were ordered to refrain from “consuming alcohol or engaging in any sexual activity while at their hotel, in order to remain ‘on call’ for any emergencies.”

Those who disobeyed faced punishment, including possible termination, according to the suit. Ambulnz even placed a security guard in the hotel lobby and required its workers to carry GPS devices to ensure they stayed put, the lawsuit said.

In an interview with The Post, lead plaintiff James Richard said he worked seven days a week for the month of April, responding to heart attacks, gunshot incidents and COVID-19 cases while helping the fire department respond to 911 calls. When he wasn’t working, Richard said he was awakened by blaring calls on his emergency-responder radio, which he was required to have with him at all times.

The 29-year-old EMT from Murfreesboro, Tenn., said he only learned of the company’s actual pay policy about two weeks into his stint when he was given a document showing that his pay — 1.25 times his regular pay, plus overtime, for seven 12-hour shifts a week — would be less than other FEMA responders.

Richard was told he could accept the terms or go home, he said. “I didn’t want to leave New York in that state,” Richard said about the city’s massive COVID-19 caseload. “Morally, I couldn’t do that.”

FEMA declined to provide information about its pay requirements, but the lawsuit claims that all other ambulance services companies contracted by FEMA during this time paid their EMTs and paramedics for 24/7 shifts.

Once its workers returned home, Ambulnz asked them to sign general-release agreements giving up their right to recover unpaid wages, said Sally Abrahamson, the group’s lawyer. She said the company also is trying to enforce arbitration agreements it had EMTs sign shortly before deploying them.

Ambulnz defended its pay practices in a statement saying that it “verified compensation practices for our New York City COVID-19 response contract with two separate, independent top-tier labor law firms,” and that both firms “confirmed that our payroll practices exceeded the amount required by law.“

However, legal experts indicated such employment conditions merit better treatment. “When you tell an employee you have to stay in your hotel room, can’t have a beer, and can’t have sex, that’s pretty good evidence that the time belongs to the company and should be compensable,” said labor lawyer Louis Pechman, who teaches a course on wage theft at Fordham University.

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Oil Extends Drop With Virus Milestones Spurring Demand Angst

Oil kept falling after just its second weekly drop since April as coronavirus infections and fatalities surpassed grim milestones in a reminder the outbreak is far from under control in many parts of the world.

Futures in New York fell below $38 a barrel after losing 3.2% last week. Deaths from the pandemic topped half a million, cases rose past 10 million and a United Nations agency reported the most infections for a single day. A surge in cases across the southern and western U.S. is causing states including Texas to reinstate measures to halt its spread, threatening the outlook for oil demand.

Prices would likely be falling further if it wasn’t for efforts by the OPEC+ alliance to restrict production. Iraq — a habitual laggard when it comes to supply cuts — is reassessing contracts to pump crude at fields where costs are high as it tries to contain expenses while curbing production, in a sign of the commitment within the group to ease a global glut.

After rebounding rapidly from its plunge below zero in April on supply cuts and recovering demand, crude has fallen in two of the last three weeks. Oil stockpiles in the U.S. are at record highs, worldwide consumption is still a long way off pre-virus levels and many refiners are struggling with low margins.

42,597 in U.S.Most new cases today

-10% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-1.​104 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

-2.​3% Global GDP Tracker (annualized), May

West Texas Intermediate for August delivery fell 1.9% to $37.75 a barrel on the New York Mercantile Exchange as of 8:16 a.m. in Singapore. Brent for August settlement declined 1.8% to $40.28 a barrel on the ICE Futures Europe exchange after dropping 2.8% last week.

In the U.S., Chesapeake Energy Corp filed for bankruptcy on Sunday, becoming one of the biggest victims of a spectacular collapse in energy demand due to the virus. Exxon Mobil Corp., meanwhile, is preparing to cut jobs to create a slimmed-down, more efficient organizational structure.

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World News

GOP Senator Implores Trump To Wear A Mask And Let COVID-19 Experts Do The Talking

Sen. Lamar Alexander (R-Tenn.), chair of the Senate health committee, implored President Donald Trump on Sunday to wear a mask “from time to time” and to leave coronavirus health and medical recommendations to the experts.

“I wish the president would wear a mask when it’s appropriate because millions of Americans admire him, and they would follow his lead,” Alexander, who is retiring at the end of this year, said on CNN’s “Inside Politics.”

His urging came as confirmed worldwide coronavirus cases surpassed 10 million on Sunday. The U.S. has the world’s highest virus death toll and on Friday reported an all-time high of 40,000 daily cases.

“My suggestion to the president all along, and for the other political leaders, is let the experts do the talking about medicine. People trust them,” Alexander said when asked whether people should look to Trump for health advice.

“If wearing a mask is important, and all of the experts tell us that it is in containing the disease in 2020, it would help if from time to time the president would wear one to help us get rid of this political debate that says, ‘If you’re for Trump, you don’t wear a mask. If you’re against Trump, you do,’”  he said.

That partisan divide was on full display Sunday on political talk shows.

Trump’s secretary of health and human services, Alex Azar, said the president and Vice President Mike Pence are exempt from having to wear masks because they are in a “unique position” in which they are tested for the virus regularly.

“Anybody around them are tested that day. They’re leaders of the free world. They have very different circumstances than the rest of us,” he said on CNN’s “State of the Union.”

House Speaker Nancy Pelosi, also speaking on CNN, voiced the opposite stance.

“The president should be (an) example. Real men wear masks. Be an example to the country, and wear the mask,” she said.

Trump has repeatedly refused to wear a mask in public. 

“I didn’t want to give the press the pleasure of seeing it,” he said in late May while visiting a Ford Motor Co. plant in Michigan.

Trump also ridiculed his presidential opponent, former Vice President Joe Biden, for wearing a mask.


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World News

Gottlieb expects COVID deaths to rise again amid “major epidemics” across the South

Washington — Dr. Scott Gottlieb, the former head of the Food and Drug Administration, warned Sunday there will likely be an increase in the number of daily deaths from the coronavirus as states report spikes in the number of new infections.
“We’re going to have many weeks ahead of us of continued growth in these cases, at least two or three weeks, even if we take aggressive actions right now, which across the board we’re not doing,” Gottlieb said on “Face the Nation.” “And I know a lot of the discussion right now is that these cases are clustered in younger people, so deaths are actually coming down, but that’s not likely to stay that way. This spread is likely to seep into more vulnerable communities and we’re likely to see total daily deaths start to go back up again.”

  • Transcript: Dr. Scott Gottlieb on “Face the Nation”

There have been more than 2.5 million confirmed cases of the coronavirus in the U.S., and the death toll is more than 125,000. While some states are reporting a decrease or leveling of infections, more than two dozen states are experiencing an increase in new cases.
Gottlieb said there are “major epidemics” underway in the South and Southeast, with Florida, which reported a record-breaking 9,585 new cases Saturday, in the “worst shape” and tipping toward exponential growth in new coronavirus infections. 
The spike in coronavirus cases follows an easing of restrictions in all 50 states, as governors allowed nonessential businesses to open again and lifted stay-at-home orders. But now, some states have put their plans for reopening on hold as they tackle the new rise in infections.
Gottlieb said the country “reopened against the background of a lot of spread,” indicating the number of confirmed cases was going to increase. He also faulted some states for moving into the different phases of their reopening plans too quickly.
“They didn’t really pause in between steps of their reopening for a sufficient amount of time to see if it was having an untoward effect,” he said. “And so as they reopened parts of their economies, they should have taken two-week pauses in between. That’s what states like Maryland, Massachusetts, New York, New Jersey, Connecticut, Michigan did and did it successfully so that they could measure the impact of their actions.”
To mitigate the continued spread of the coronavirus, Gottlieb called for universal masking, as wearing a mask will protect individuals and fellow citizens they may come into contact with.
“I don’t understand why we can’t mandate it in states that have major epidemics underway, and there’s a number that do right now,” he said. “We mandate that people have to wear seat belts in cars, but we’re not saying that they have to wear a mask in the setting of an epidemic.”
Gottlieb said that if a large percentage of the population were to wear masks regularly, “that alone could reverse the epidemic.”

“It’s the simplest intervention that we can take that could have an impact on the spread right now,” he said.

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Millions of Workers Fled India’s Cities and Don’t Want to Return

From March through May, around 10 million migrant workers fled India’s megacities, afraid to be unemployed, hungry and far from family during the world’s biggest anti-Covid lockdown.

Now, as Asia’s third-largest economy slowly reopens, the effects of that massive relocation are rippling across the country. Urban industries don’t have enough workers to get back to capacity, and rural states worry that without the flow of remittances from the city, already poor families will be even worse off — and a bigger strain on state coffers.

Meanwhile, migrant workers aren’t expected to return to the cities as long as the virus is spreading and work is uncertain. States are rolling out stimulus programs, but India’s economy is hurtling for its first contraction in more than 40 years, and without enough jobs, a volatile political climate gets more so.

“This will be a huge economic shock, especially for households of short-term, cyclical migrants, who tend to come from vulnerable, poor and low-caste and tribal backgrounds,” said Varun Aggarwal, a founder of India Migration Now, a research and advocacy group based in Mumbai.

In the first 15 days of India’s lockdown, domestic remittances dropped by 90%, according to Rishi Gupta, chief executive officer of Mumbai-based Fino Paytech Ltd., which operates the country’s biggest payments bank.

By the end of May, remittances were back to around 1750 rupees ($23), about half the pre-Covid average. Gupta’s not sure how soon it’ll fully recover. “Migrants are in no hurry to come back,” Gupta said. “They’re saying that they’re not thinking of going back at all.”

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If workers stay in their home states long term, policymakers will have more than remittances to worry about. If consumption falls and the new surplus of labor drives wages down, Agarwal said, “there will also be a second-order shock to the local economy. Overall, not looking good.”

India announced a $277 billion stimulus package in May and followed it up with a $7 billion program aimed at creating jobs for 125 days for migrants in villages across 116 districts. Separately, local authorities are also looking for solutions.

Officials in Bihar have identified 2,500 acres of land that could be made available to investors, said Sushil Modi, deputy chief minister of Bihar, a state in east India. “We can use this crisis as an opportunity to speed up reforms,” he said.

The investors haven’t materialized yet, and in the meanwhile, state governments are relying on the national cash-for-work program that guarantees 100 days worth of wages per household.

Skilled workers don’t want to do manual labor offered through the program, and even if they did, says Amitabh Kundu of RIS, many think of it as beneath their station. “There will be an increase in social tensions,” he predicts. “Caste may again start playing a role. It’s absolute chaos.”

For skilled workers, initiatives vary:

* Uttar Pradesh, which received 3.2 million people, is compiling lists of skilled workers who need employment and trying to place them with local manufacturing and real estate industry associations. So far, the government says, it’s placed 300,000 people with construction and real estate firms.

* Bihar has placed returners in state-run infrastructure projects and hired others to stitch uniforms and make furniture for government-run schools, even as they waited in quarantine centers, said Pratyay Amrit, head of the state’s disaster management department.

* The eastern state of Odisha announced an urban wage employment program aimed at putting as many as 450,000 day laborers to work through September. Some 25,000 people have been employed, so far, under the scheme, G. Mathivathanan, principal secretary for housing and urban development said.

Attracting Investments

It’s not clear any of this will be enough to make a dent, says Ravi Srivastava, professor at New Delhi-based Institute of Human Development, adding that the states don’t have much of a track record on economic development.

“It was the failure of these states to improve governance and put development plans in place that led to the out-migration in the first place,” he said.

But officials and workers’ rights advocates see opportunity. Uttar Pradesh has established liaisons to encourage companies from the U.S., Japan and South Korea to establish manufacturing in the state. There and in Madhya Pradesh and Rajasthan, the government has made labor laws more friendly to employers, making it easier to hire and fire workers.

Modi, the minister from Bihar, said the migration may also give workers–historically a disenfranchised group–new power, particularly as urban centers struggle. “The way industries treated workers during the lockdown — didn’t pay them, the living conditions were poor — now these industries will realize the value of this force,” Modi said.

“In the days to come, labor will emerge as a force that can’t be ignored anymore,” he added. “That’s the new normal. We will work out how to ensure dignity, rights to our people who are going to work in other states.”

Bihar is due for elections by November, a vote that could be an early test of the mass migration’s political consequences. The state is currently governed by a coalition that includes Prime Minister Narendra Modi’s Bharatiya Janata Party. Amitabh Kundu, a fellow at the Research and Information System for Developing Countries, a New Delhi-based government think-tank, said migrant workers are likely to be angry voters.

“Chief ministers are telling these migrants that they will not have to go back for work,” he said. “But their capacity to do something miraculous in next four to five months is doubtful. If they can retain even one-fourth of the migrants, I would call it a success.”

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Couple suspected of coronavirus relief fraud caught fleeing the country

US states see spikes in unemployment fraud

States like Massachusetts and Washington have reported a rise in cases of unemployment fraud, amounting to millions in fraudulent claims paid. FOX Business’ Edward Lawrence with more.

A Virginia couple has been arrested for allegedly submitting false loan applications under the Paycheck Protection Program which resulted in a payout of more than $1.4 million in coronavirus relief.

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According to a release from the U.S. Attorney's Office for the Eastern District of Virginia, Monica Magdalena Jaworska, 43, and her husband, Tarik Jaafar, 42, were arrested at John F. Kennedy International Airport while attempting to flee to Poland.

Jaworska made an initial appearance in federal court last week for accusations of conspiracy to commit wire fraud.


The couple is accused of submitting 18 PPP loan applications between April and May 2020 containing false statements to twelve financial institutions, according to court documents.

Prosecutors said the couple used fraudulent IRS forms to indicate they were supporting dozens of employees, but an investigation by the Small Business Administration found that the forms didn't exist.


As a result of the false statements, three financial institutions disbursed four loans totaling $1,438,500. While some funds were frozen, prosecutors said Jaafar was able to withdraw at least $30,000 in cash.


If convicted, Jaworska and Jaafar each face a maximum penalty of 20 years in prison.


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Australia’s Cotton Areas Shrink to the Least Since the 1970s

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Australia’s cotton crop area has plunged to the smallest in four decades as years of drought slashed growers’ access to water and prevented planting.

As picking in the country finishes for another season, 2019-20 production is estimated to have decreased 72% on the year to 134,000 tons of lint because of low irrigation water supplies, Australian government forecaster Abares said in its June report. The area planted for cotton is estimated to have declined by 83% to 60,000 hectares, the lowest since 1978–79, according to the report report.

Australia’s low supplies contrast with the U.S. and much of the world, which is experiencing a cotton glut due to worsening retail conditions as pandemic lockdowns continue. The U.S. Department of Agriculture this month cut its 2020-2021 world consumption forecast by 1.8%, and raised its estimate for August 2021 global reserves to the second-highest since at least 1960.

“We’re expecting 550,000-600,000 bales once it’s processed,” said Adam Kay, chief executive of Cotton Australia. A bale is 227 kilograms of fiber. “The previous year was 2.2 million bales and the year before that was 4.1, so you can see the impact of the drought.”

Rains in February and March had seen rivers start flowing and had put water in dams, so estimates for next year’s crop are more positive at as high as 1.7 million bales, he said. “It’s starting to creep in the right direction.”

Much of this year’s, and some of next year’s, output has already been forward sold to China, Kay said, offering some relief to farmers amid the coronavirus-related demand slump.

Prices have come down due to a lower appetite for the fiber, though the smaller crop size has offered some support compared with prices in competing countries, said Michael O’Rielley, chairman of the Australian Cotton Shippers Association.

“As demand continues to fall away, prices will come under pressure a little more than what they already have,” he said.

The world cotton indicator price is forecast to fall by 12% on the year to an average of 63 cents per pound in 2020–21, according to Abares, amid mill closures this year and expected price competition from synthetic fibers.

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