At Rs 8,000/quintal, price of kapas sees sharp spike in wholesale markets
When kapas prices showed a sharp correction in December, farmers urged the Cotton Corporation of India (CCI) to actively participate in open market procurement to stabilise the price.
In Punjab, cotton crops got damaged because of unfavourable weather conditions during the season and the attack of various diseases.(Representational/Image) After a brief halt, the price of kapas — raw unginned seed cotton — has seen a sharp increase to Rs 8,000-8,500 per quintal in most of the wholesale markets across the country. Traders say the trend would continue till January 15 this year, following which the arrival is also likely to increase. The cotton marketing season — between November 2022 and October 2023 — has opened, with farmers commanding average prices of Rs 8,500-9,000/quintal in most of the wholesale markets in India.
When kapas prices showed a sharp correction in December, farmers urged the Cotton Corporation of India (CCI) to actively participate in open market procurement to stabilise the price. Meanwhile, the Cotton Association of India (CAI) — that represents the entire value chain of the industry — this season downgraded its earlier estimates of production by 4.25 lakh bales to 339.75 lakh bales.
Combined with the 31.89 lakh bales and an estimated import of 12 lakh bales, the total availability of cotton this season would be around 383.64 lakh bales, according to CAI estimates. With the beginning of New Year, farmers have again been commanding the price at Rs 8,000-8,500/quintal for kapas. According to trade sources, the real price trend would be visible only after January 15, when the
arrival is likely to improve significantly. “Almost 80 per cent of the arrivals are expected to be completed between January 15 and May-end… It is likely that only big farmers or traders would like to hold on for better prices,” said a trader from Buldhana.
Meanwhile, the government’s decision to allow duty free import of 3 lakh bales of cotton from Australia has been questioned by the industry. According to a notification issued on December 28, the import was allowed as part of economic cooperation between the two countries — India and Australia. While farm leaders felt the free import (imports at present attract a 11 per cent import duty) would affect the realisation of the farmers, traders felt otherwise.
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