Gujarat’s Cotton Prices Remains Low Despite CCI’s Purchase of 11 Lakh Bales

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Despite the Cotton Corporation of India (CCI) purchasing more than 11 lakh bales of cotton from Gujarat, cotton prices in agricultural produce market committees (APMCs) in the state remain depressed due to low demand, with experts saying that the phenomenon is likely to persuade farmers to decrease cotton acreage in favour of groundnut.

 

CCI officials said they have purchased more than 11 lakh bales (each containing 170 kg of lint) or 55 lakh quintals of kapas (raw, unginned seed cotton)in the 2019-20 season, the highest procurement from Gujarat since 2008. “We are withdrawing from the market now. We are already a few weeks into the monsoon and rain is affecting purchasing operations,” said a senior official, adding that the CCI procured around one lakh bales in June.

 

Though the peak cotton marketing season, which begins in Gujarat in October and runs through June is over, APMCs are still recording significant arrivals of the natural fibre on their yards and the withdrawal of CCI from the market can further depress prices, market insiders say.

 

Botad APMC, one of the biggest cotton markets in the state, recorded arrival of 3,000 quintals of cotton on Tuesday and the average price was Rs 4,250. In Rajkot APMC, 1,600 quintals of cotton arrived where the modal price was again Rs 4,250, which is way below the minimum support price (MSP) of Rs 5,525 fixed by the Central government.

 

“Farmers could not sell their cotton for two months, beginning late March due to lockdown… Therefore, we are witnessing comparatively higher arrivals even though normal cotton marketing window is over,” said Babulal Tejani, secretary of Rajkot APMC.

 

“The cotton processing pipeline is choked. Due to restrictions on movement of labour and goods during lockdown, cotton couldn’t be transported to textile mills in southern India and export was also very little. Therefore, prices crashed. As APMCs were shut during lockdown, arrivals now are higher even as buyers are not upbeat. Therefore, prices are remaining low,” said Kantitlal Ladola, secretary of Botad APMC.

 

The sowing of the crop this kharif season is trailing to groundnut. As of Monday, farmers had sown cotton in 15.71 lakh hectare (lh), data with the director of agriculture of Gujarat shows. This represents just 58.88 per cent of 26.68 lh which was under cotton the previous season. On the other hand, groundnut has gained ground with its acreage standing at 16.36 lh, up from 15.52 lh recorded the previous season. Agriculture department officials say these figures are likely to go up in the coming weeks.

 

Bhimji Sagarka, director of extension education at Junagadh Agricultural University, Junagadh, says, “Last season, first two flushes in cotton failed due to excessive rain and pink bollworm infestation troubled farmers in the later flushes. So, the production was not satisfactory. No such uncertainties are generally attached to groundnut. With weather permitting, groundnut is an assured crop, which also provides premium fodder besides marketable oilseeds. Unlike cotton, groundnut also allows relay-cropping of red gram (tur) and castor seeds. So, we estimate that groundnut acreage will go up 20 per cent and cotton acreage will come down commensurately.”

 

Groundnut has been trading at average Rs5500 per quintal, which is higher than the MSP of Rs5090.

 

Sagarka said besides rewarding prices of groundnut, migration of labours were also affecting farmers choices. “Cotton is more labour-intensive as compared to groundnut. Last year, labour charges for picking cotton were high and farmers expect them to even higher this year with labourers having returned to their native states due to lockdown,” added Sagarka.