Soaring cotton prices and good demand bring smile to Maha farmers

Cotton prices hovering in the R5,700-5,800 per quintal range and good demand in the market, brings smile on faces of farmers in Maharashtra. This time the procurement centres established by the Cotton Corporation of India (CCI) and the Maharashtra State Cooperative Cotton Growers Federation (MSCCGF) have purchased little or almost no cotton as around 125 quintals have been purchased by traders in the state.

According to N P Hirani, chairman, MSCCGF, there has been no purchase at the procurement centres for obvious reasons. These centres are offering a Minimum Support Price (MSP) of R4,160 while farmers are getting better prices outside. This is a very good situation for the farmers and both the CCI and federation are only meant to intervene in the market for the benefit of the farmer.

For years, the federation has been purchasing from farmers but this tie the procurement centres are deserted as farmers prefer open market where private traders offer much more than the MSP at which federation purchases. This time the farmers are playing the waiting game. Arrivals are to the tune of some 1.25 lakh quintals on a daily basis and large farmers are holding onto stocks.

The international prices are also higher at R44,956 per candy while the domestic rates are in the range of R41,700-42,300 per candy. Cotton seed prices are high and in the range of R2,500-2,850 per quintal while cottonseed oil cakes are in the range of R2,200-2,450 per quintal.

As per CCI expectations, Maharashtra is expected to produce some 90 lakh bales which translate into 450 lakh quintals. Of this, around 125 lakh quintals have reached the market and another 50 lakh quintals may have been sold outside. So there is plenty of cotton still available with farmers who are holding onto their produce this time in anticipation of good prices.

According to Hirani, there is good demand for Indian cotton from Pakistan, Bangladesh, Vietnam, Indonesia and China. As per unconfirmed reports, Pakistan has purchased some 20 lakh bales, Bangladesh has purchased around 10-12 lakh bales, China some 15-20 lakh bales and 5-6 lakh bales have reached other markets.

Moreover, traders are coming from Gujarat in large numbers and are purchasing cotton from farmers’ doorsteps resulting in high prices, there is no way to quantify the amount that has been purchased.

As on Jan 30, 2017 about 146.5 lakh bales have arrived in the market. Maharashtra is leading the arrivals figures at 40.7 lakh bales followed by Gujarat at 31.8 lakh bales.

The Cotton Advisory Board has pegged the output at 351 lakh bales for the 2016-17 season starting October. The production and consumption of cotton as predicted by the Cotton Advisory Board for this season (October 1, 2016 to September 30, 2017) are 351 lakh bales and 313 lakh bales (of 170 kgs each), respectively. While, the International Cotton Advisory Committee expects the cotton output in India this year to remain unchanged at 58 lakh tonnes from 2015-16.