The planting estimate is back 800 hectares from last year due to zero water allocation for surface water.

Twelve growers planted cotton last season and a similar number is expected to plant again this year.

Growers in the Murrumbidgee and Lachlan Valleys were tipped to rely heavily on groundwater this year because of the high price of buying water.

NSW Department of Primary Industries (DPI) southern regional cotton extension officer with the Cotton CRC, James Hill, of Hay, NSW, said planting estimates had increased in the past week due to a better forecast price.

He said the total area planted was linked to the cotton price, an absence of surface water, and prices per megalitre.

Mr Hill said some potential growers in Southern NSW were still assessing their options and considering using water to finish off winter wheat rather than plant cotton.

"The crop this year is totally groundwater dependant," he said.