Textile Industry

Cotton Farmers in Gujarat and Maharashtra Holding Out for Higher Prices, Causing Ginning Industry Shutdown

Published: January 6, 2023
Author: TEXTILE VALUE CHAIN

The majority of farmers are no longer selling cotton at cheaper prices this year due to better holding capacity, which is bad news for the state’s ginning industry. About 60% of ginning plants halted in January due to a lack of raw materials, which, according to ginners, is likely a first.

According to experts, farmers in Gujarat and Maharashtra aren’t selling as much cotton as they used to. As a result, until the end of December, the arrival of the cotton harvest across the nation reduced by almost 15%. In Gujarat, it decreased by almost 8%. As a result, cotton prices rose once more, which reduced the competitiveness of Indian cotton on the global market. 

For the first time, farmers are not selling cotton, which is causing ginning mills to shut down in January. Only 40% of Gujarat’s 1,300 ginning facilities are now in operation. In Maharashtra, the circumstance is comparable. The ginning industry’s busiest period is from November to January. Units from Saurashtra provide South Indian spinning mills with raw cotton bales. According to Hitesh Rughani, secretary of the Saurashtra Ginners’ Association, the mills aren’t currently buying.

The promoter of a ginning facility situated in Limbdi, Apurva Shah, stated: “Ginning units are closed since there is very little cotton arrival. Last year, cotton farmers received record prices; but, this year, prices are lower, and farmers are hesitant to sell at reduced prices. In January, Gujarat often receives more than 50,000 bales per day, but this time, only 35,000 bales have arrived. According to our calculations, Gujarati farmers now have a supply of almost 72 lakh bales but they are not selling.

The GujCot Trade Association reports that up to December, Gujarat saw arrivals totaling roughly 25 lakh bales, or about 27% of the total anticipated crop. “Gujarat typically records arrivals of 35% of the crop of cotton by the end of December each year. Because the rates are lower than they were last year, it is down by about 8% this year. Gujarati cotton growers have extra storage space and aren’t selling their crop in anticipation of higher prices. By the end of December, India had registered about 85 lakh bales, which is roughly 15% less arrivals than usual. According to Ajay Shah, secretary of the GujCot Trade Association, Maharashtra has seen a decline in cotton arrivals this year.

Gujarat’s cotton crop is anticipated to be about 93.50 lakh bales, up from 76.30 lakh bales previous season, according to the Cotton Association of India.

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