The gross value of cotton production is forecast to increase by 157 per cent to $4.3 billion by the end of the 2022 fiscal year.
This rise is on the back of a sharp increase in production volumes and strong international prices.
And cotton export values are predicted to increase by a staggering 404pc to $3.4 billion in 2021-22 and a further $4.1 billion in 2022-23 with favourable production conditions to continue and large crops.
This is according to the latest Outlook report from Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES).
The national forecaster also predicted total cotton production around the world to increase by 8.1pc tp 27 million tonnes of 600,000 bales
Favourable conditions across most of Australia's cotton growing regions mean production estimates sit at 5.2 million bales, almost 10 times larger than the drought impacted 2019-20 crop of 590,000 bales.
International prices are expected to surge with the Cotlook 'A' index forecast to average US116 cents per pound in 2021-2022, up by 35pc compared to the previous year.
The surge is expected to stem from a combination of strong demand for cotton coupled with global supply chain disruptions causing cotton mills to seek additional buffer stocks, driving international prices.
According to the national forecaster, disruptions to international freight have proven to be a significant barrier to trade with the world's largest exporter, the US, struggling to get its recent 2021-22 cotton crops to major import markets.
But although demand for cotton is expected to grow, an easing of supply chain bottlenecks will result in lower international cotton prices in 2022-23 averaging US98c/pound.
However, if supply chain issues persist into 2022-2023, cotton prices would be expected to remain elevated.
The report suggests over subsequent years, movements in the Cotlook 'A' index are expected to be determined by income growth and timing of the resolution of supply chain constraints.
A faster global economic recovery is expected to average US 115c/pound in 2026-27, however should recovery take longer, higher average prices are expected into 2024-25.
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