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Cotton price soars to Rs 10,000/quintal in Gujarat mandis

In Rajkot APMC, among the largest cotton markets of the state, the price touched Rs 10,050 -- the highest so far -- on Thursday. In Gondal APMC too, the highest price was Rs 10,000.

Written by Gopal B Kateshiya | Rajkot |
Updated: December 31, 2021 11:21:19 am
Cotton being handled on the yard of Jamnagar APMC, in Jamnagar on Thursday. (Express photo)

PRICES OF kapas (seed-cotton) touched a historic high of Rs 10,555 per quintal in the yard of agricultural produce market committee (APMC) mandi in Jamnagar Thursday. Traders say the rates of the natural fiber are going through the roof this season due to a drastic fall in production.

The price of kapas in Jamnagar mandi remained in the range of Rs 7500 to Rs 10,555 Thursday with modal price (the price at which the majority of a commodity gets sold on a given day) being Rs 10,000. “This is a historic price and the highest in the entire state. Last year, the highest bid was Rs 6,825 but this year, farmers are realising an average Rs 3,000 higher price,” said Hitesh Patel, secretary of Jamnagar APMC.

In Rajkot APMC, among the largest cotton markets of the state, the price touched Rs 10,050 — the highest so far — on Thursday. In Gondal APMC too, the highest price was Rs 10,000. The lowest in both these APMCs was Rs 7,511 and Rs 5,000 respectively with the modal price being around Rs 9,500.

The price of around Rs 9,500 is almost double as compared to last year’s average price of around Rs 5,500.

Cotton auction in progress in Jamnagar APMC, in Jamnagar on Thursday. (Express photo)

Cotton traders ascribed the phenomenon to a drastic drop in cotton yields coinciding with a negligible carry-forward stock of the previous year in India and an empty pipeline of the domestic cotton ginning and spinning industry. “The cotton arrivals in APMCs are almost half as compared to normal years even as demand from the domestic ginning and spinning industry is high as its raw material pipeline was empty due to almost nil carry-forward stock of the previous year. December-January marks the peak of cotton marketing season and normally, Jamnagar APMC records arrivals of around 2,000 quintals daily. But it is hardly around 1,000 quintals these days,” said Mahipatsinh Jadeja of Rajeshwari Trading, a cotton trading firm in Jamnagar APMC. Secretary Patel agreed the arrivals are low this year.

Similar is the case in Rajkot and Gondal. Rajkot APMC recorded arrivals of 3,450 quintals Thursday. On December 31 last year, cotton arrivals in Rajkot APMC were recorded at 5,400 quintals but the price was in the range of Rs 4,860 to Rs 5,705. In Gondal, arrivals on Thursday were 1,951 quintals, which secretary Tarun Panchani said, was almost half as compared to corresponding period of the previous years.

“On the one hand, arrivals are low and on the other, prices of cotton seeds have remained steady at around Rs 3,750 per quintal and that of de-oiled cotton cake (DOC) at around Rs 1,800 per bag (of 50 kg). Despite high prices, overseas demand for cotton candy (ginned cotton) and cotton yarn has remained good. All these factors are propelling kapas prices to new levels in APMCs,” Prabhudas Jasani, a cotton trader in Rajkot APMC said.

Cotton seeds are crushed to extract oil which is used as cooking oil and DOC which is generated as byproduct during crushing is a premium cattle-feed concentrate in Gujarat.

Farmers said unfavourable weather and attack by pink bollworms have kept the yield drastically low. “I have been able to harvest only 200 mann (40 quintal) kapas from my 40 bigha (6.25 bigha make a hectare) plantation this year and I am expecting only one more picking. The average yield, which remains around 20 mann per bigha, will drop to 10 mann this year as it rained excessively towards the fag-end of monsoon in September. Then came pink bollworm attack. On top of this, due to unfavourable weather, the cotton bolls are not opening up these days and therefore there is nothing to harvest,” said Amit Garala, a farmer from the Charakhadi village in Gondal taluka of Rajkot.

Garala is also a cotton trader in Gondal APMC. “Cotton traders of Gondal would procure average 400 quintals of cotton from farm-gates in the villages of Gondal during this time of the year but this year, they are hardly able to source 75 quintals as farmers don’t have cotton and whatever they are able to harvest, they prefer to sell in APMC,” said Garala.

Gujarat is the largest producer of cotton and accounts for almost one-fourth of total cotton production in India. However, cotton acreage in the state dropped to 22.53 lakh hectare (lh) in the Kharif season 2021-22 as compared to 22.78 lh the previous season and the average of 25.53 lh recorded over the previous three years. The state government’s First Advanced Estimate pegs the cotton production in Gujarat at 80.95 lakh bales (each containing 170 kg of seed-cotton), which is normal as compared to the previous year. “However, this estimate is going to prove wrong this year as yields in the first and second pickings have been low,” said Garala.

On a pan-India level also, the acreage has declined to 124 lh this season as against 131 lh in the Kharif season 2020-21 but the government estimates the production to remain 354 lakh bales. “Not only in Gujarat, yields are being reported to be low in Maharashtra and Andhra Pradesh also due to excessive rains, unfavourable weather, pink bollworm attacks. Hence, cotton prices are rallying in every market of the country,” Jadeja added.

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