Centre’s free imports to subdue cotton prices leave Maharashtra gin owners in dire straits

Indian ginners said the bales and candy — a trading unit, here referring to 340 kg of pressed de-seeded cotton — are sold at higher prices in the international markets due to the fact that cotton is purchased at government-declared Minimum Support Price (MSP). For this season, the MSP of cotton is Rs 7, 710 per quintal, which has to be taken into account while finalising the price of the candy. This invariably makes the candy trade at a higher price than imports as the concept of MSP does not exist in other cotton growing countries, especially in USA. Thus at present, while Indian candy is being traded at Rs 55,000-56,000, imported candies are available at Rs 51,000-52,000. Since the central government had waived off the import duty, Indian candy prices have come down by Rs 1,000/quintal.

Pradeep Jain, founder director of Khandesh Cotton Gin Press Factory Owners Traders Welfare Association said the bigger question before the entire value chain would be the realisation of farmers. Jain said most of the gin press owners and traders will likely face losses due to the availability of cheap imports. “But unless the central government through the Cotton Corporation of India (CCI) steps in early, farmers would face severe losses” he said.
At Khandesh, the Muhurt trade of cotton fetched Rs 7,600/quintal – which is lower than the MSP. This, traders said, was a warning sign as once the arrivals start, it would dip further. The condition of the cotton crop in most parts of the country is said to be good without any major reports of losses or pest infestation. Indian farmers had taken cotton over 108.47 lakh hectares over the 111.39 lakh hectares of last season. Most farmers are worried about price realisation given the easy availability of cotton from overseas.

Farm leader Vijay Jawandhiya had called the move suicidal, as it would stress farmers. “The government had promised not to let farmers be affected – we want the government to remember its words,” he said.