The sudden dip in the global demand due to the pandemic scare and poor quality of raw cotton in areas of Punjab has lowered rates of the kharif crop by up to ₹1,500 quintal in the last two weeks.
But farmers continue to get much above the minimum support price (MSP) of ₹5,925 per quintal.
Industry watchers say in the last one month, mode rate or the maximum average price of the kharif produce was about ₹9,500 per quintal. It means 70% of the crop was purchased at around ₹9,500 and nearly 10% of the best quality produce was sold even higher than ₹9,500. And nearly 20% was sold below the mode rate due to poor quality.
However, the mode rate of cotton in the last 10 days remains static at about ₹8,000 per quintal.
According to the Punjab Mandi Board data, 9.57 lakh quintal of cotton was purchased in the state till Saturday. Of that, only 5,545 quintal produce was bought by the private players below MSP.
Chander Kant Garg, a Mansa-based cotton ginner said this time the leading cotton-growing districts of Bathinda and Mansa saw the worst-ever quality of cotton. Garg said he has a stock of ginned cotton worth ₹3 crore but no textile unit is ready to buy it due to the quality of the natural fibre.
“Reflectance (Rd) value that determines bright or dull a cotton sample continues to much less than the acceptable value of 72-82. The produce lost its white colour due to widespread pink bollworm infestation in the twin districts. Traders bought cotton at competitive rates to meet demand but now there are no buyers in the market for the yellowish cotton,” said Garg.
Industry sources say rates may pick up again after December 15 as the picture of the new Covid-19 variant Omicron may be clearer and demand regains the momentum.
Mandi Board cotton state coordinator Rajnish Goel said this time the cotton arrival in the purchase centers across the rate was nearly 54% less in comparison with the last year.
Last year till December 4, Punjab had recorded more than 21 lakh quintals of raw cotton whereas in the corresponding period this year is only 9.57 lakh. It is attributed to damage to the standing crop by the deadly pest, he added.
“As per the traditional trend, cotton arrival picked up for the last week as farmers are done with wheat sowing. Now the daily arrival is about 15,000 quintals,” said the official.
Director of Indian Cotton Association Limited, a body dealing in export, spinning, ginning of cotton, Rakesh Rathi said the textile sector in the USA has reduced importing cotton as per its economic decisions.
“Cotton rates in Punjab were high since the beginning of the season as traders had to meet export demands. As cotton harvesting in the central and south Indian states was delayed due to rains, rates were record high than usual. As the new crop has started arriving from other states, prices in Punjab were expected to be corrected at this phase. But rates may not drop beyond ₹8,000 mark,” said Rathi.
