Updated: September 5, 2021 6:58:52 am
India is starting the next cotton season on a healthy note due to increased domestic consumption and healthy exports. Traders are optimistic that in the next season, the price of kapas (raw unginned seed cotton) will be higher than the government-declared Minimum Support Price (MSP) of Rs 5,726 per quintal.
Pradeep Jain, founder-chairman of Khandesh Gin/Press owners and Traders Development Association, said domestic sale of cotton bales has seen a substantial increase in the current cotton season (October 2020-September 2021). “Normally, domestic consumption is pegged at 320 lakh bales but this year we will end up selling 350 lakh bales,” he said. The high demand is due to various government initiatives aimed at the sector.
Cotton bales refer to the ginned and milled product produced by removing seed from raw cotton. Each cotton bale has around 170 kg of ginned cotton and is used both by domestic and international makers to make cotton yarns.
Thanks to a revival of domestic yarn industry, manufacturers of machines used by yarn markers have also seen brisk business. Jain said their order book is full for the next two years.
Higher domestic consumption may also lead to the trade correcting its export figures. “We feel that India will end up exporting around 65-66 lakh bales of cotton for the current season,” said Jain. He added that the outlook for the new season looked good for the whole cotton value chain.
At the start of the 2021-22 cotton year, the opening stock with spinning mills and yarn markers would be around 80 lakh bales, which is a healthy carry-forward stock.
Meanwhile, the Cotton Corporation of India has almost managed to offload the cotton stock it had procured during the last season.
P K Agarwal, CMD of the corporation, said of the 92 lakh bales they had procured, only 8.5 lakh bales remain with them. “We have offloaded around 97 per cent of our stock,” he said. Agarwal said given the bullish trend in cotton markets, they do not feel they would need MSP operations.
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