December 31, 2021 11:10:14 am
A drastic reduction in the country’s cotton production can play spoilsport for the its export target of 60 lakh bales (each bale is 170 kg pressed ginned cotton). Industry insiders said that this year exports will be around 30-35 lakh bales as domestic prices and shortage is likely to play spoilsport throughout the season.
Global supply glut has seen price of raw seed cotton trading well above its minimum support price (MSP) of Rs 5,726 per qunital right at the start of the cotton marketing season (October-September).
At present, kapas is trading around Rs 8,000-8,500 per quintal. Buoyed by good prices, most farmers are holding on to their crop in hope of further rise in prices in the days to come. As against the estimate of 340-345 lakh bales industry experts say that the production is in the range of 300-315 lakh bales during this season.
“Unseasonal rains, pests like pink bollworm and white flies have led to lower-than-expected production,” pointed out a trader from Punjab.
Given the short supply and bullish prices, farmers are holding on to their crop with the markets reporting the arrival of just 125 lakh bales till date. Traders say that exportscan be hit as most of the production would be used in the domestic supply. Till date around 15 lakh bales of cotton has been exported with many saying the final figure for this season would around 30-35 lakh bales.
Meanwhile, gin and press owners have talked about a glut in supply, which has affected their operations. Pradeep Jain, founder president of Khandesh Press Gin/Press Owners Traders Development Association, said that arrival in markets is low as farmers are holding on to their produce for better prices. Traders say most farmers feel that kapas prices would breach the Rs 10,000 per quintal mark in 2022 and thus are holding on to their produce.
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