By admin       2019-04-08

April 5, 2019 - With cotton prices currently in the range of `6,100-6,200 per quintal and stock in short supply, ginning units in Maharashtra are finding it difficult to source it for their units. The 150-odd units in Khandesh — one of the major cotton processing regions in the state — are working at 30-40% capacity. Pradeep Jain, president, Khandesh Cotton Gin/Press Owners Association, said there was very little cotton left in the market and what was left is of poor quality with reduction in weight. Arrivals were meagre and barely 15% stock might be left with farmers in Khandesh region, he said. According to market reports, some 55-60 lakh bales are still with farmers across the country. According to industry estimates, there could be a shortage of some 32-33 lakh bales this season. Jain said normally, the units in Khandesh region have the capacity to process some 30-35 lakh bales during a season. In December 2018, the units were running at 50% capacity on weak arrivals. Prices are firming up and likely to remain in this trend, with stock in short supply due to drought. The cotton inventory with the government agencies is also reported to be lesser by 30% as compared to the previous season. Currently, farmers in Gujarat, Maharashtra, Telangana, Odisha, Tamil Nadu and Madhya Pradesh still have some stock left. Farmers in Haryana, Punjab and Rajasthan have little or no cotton with them. Maharashtra processes about 80 lakh bales annually. Around 60,000 labourers are working in these units and the majority of these are located in Marathwada region. The state has a capacity of producing 1 crore bales. Significantly, the Cotton Corporation of India (CCI) has already commenced the sale of the commodity procured by the agency in the current marketing season under the government Minimum Support Price procurement programme. There has been a sharp decline in market arrivals in recent weeks. Since early March, prices have strengthened by `3,000 a candy (356 kg each) to `44,500 and spot prices are in `45,000-45,500 per candy. After 26% year-on-year increase in 2018-19, the MSP for medium-staple variety of cotton is at `5,150 per quintal and that for long staple at `5,450. After conversion, the MSP equivalent price comes at `41,000-42,000 per candy. CCI could purchase only 10.7 lakh bales under the MSP scheme. Over 70% of the procurement has been from Telangana and Maharashtra. Market arrivals till April 1 stood at 254 lakh bales of 170 kg each. The Cotton Association of India, the apex trade body, had pegged the crop size at 328 lakh bales for the year. Some 2 lakh bales have been exported to Bangladesh. Another 40 lakh bales have been exported to Vietnam, China and Bangladesh, among others. Another 5-6 lakh bales are expected to be exported, according to reports.

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