Cotton prices in Maharashtra have gone up, with farmers selling their seed cotton (kapas) at around Rs 5,100 per quintal. This improvement, ginners said, was mostly due to the increased price of cotton seed cake, demand for which has increased in the past few weeks.
At the start of the cotton harvesting season in October, growers in Maharashtra were selling their produce at around Rs 4,500 per quintal — Rs 1,000 lesser than the Minimum Support Price (MSP) of Rs 5,500.
Quality concerns and influx of cheap imports, ginners said, had depressed the prices of the lint in the wholesale markets. Due to higher MSP, ginners had said exports from India were non-viable, while availability of cheaper imports had pulled down kapas prices at the wholeseller end.
Cotton Corporation of India (CCI), which has commenced MSP procurement, has procured around 9 lakh bales (each bale weighing 170 kg) of the fibre in around 300 of its centers. Farmers in Maharashtra have reported yield loss both due to moisture stress in the growing phase as well as heavy rains just before the picking stages. Maharashtra has around 43 lakh hectares under cotton — the highest reported in the past few years.
Pradeep Jain, founder president of Khandesh Gin/Press owners and traders welfare association, said the present price rise is mostly due to the increased demand for the deoiled cotton seed cake.
The cake serves as a protein source for poultry and animal husbandry, and the sharp rise in soyabean cake prices has led to more demand for the cotton cake. However, the bigger worry for the industry is the lack of price parity for Indian cotton in the international markets, which can dampen imports. As per the data released by the Cotton Association of India (CAI), around 5 lakh bales have been imported till the end of November.
In its report released Wednesday, CAI has kept its production forecast of 354 lakh bales unchanged, with imports being slated at 42 lakh bales. Jain, however, said exports would be possible only if government allows for a subsidy.
While CAI has kept its production forecast constant, many ginners and growers have talked about a 5-10 per cent dip in the estimates, which they say might help cotton prices firm up further.