India: Cotton farmers face depressed prices

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More production and less gain has been the gloomy tale for farmers in region this year. Anticipating good remunerative prices in basmati and cotton, growers for both the kharif crop have been left dejected. Cotton farmers in Punjab and Haryana in anticipation of better returns had increased the area in anticipation of good gains but realisation till now has been 20-30% less, compared to last year.

Sushil Mittal , President Haryana Cotton ginners Association adds the prevailing prices of cotton varieties till now are depressed compared to last year.

 The prevailing prices of kapas and narma varieties this year are around Rs 3500 per quintal and 4200 per quintal respectively, compared to Rs 5000 per quintal and Rs 5500 per quintal last year.

 The depressed prices are bound to impact decision of cotton farmers, who possibly could bring down the area under cotton sowing next year.

The main reason behind depressed prices has been increase under the area. Also the local mills, purchasing cotton this year, has been more cautious. Cotton ginners add the mills are buying cautiously and seems in mood to pile up the stocks, a trend observed last year.

Punjab and Haryana are eying production of around 50lakh bales of cotton this season as against 39 lakh bales cotton, an increase of around 30% production this year. Cotton sowing in Punjab this year is reported to be over an area of 5.60 lakh hectare as against 4.83 lakh hectares reached last year. In Haryana cotton this year has witnessed the area surging to over 6 lakh hectares as against 4.92 lakh hectare covered under the cotton last year.

Rakesh Rathi , President North India cotton association maintained internationally prices have remained depressed owing to various reasons .

The prices of cotton internationally, are currently seen at 90 cents per pound compared to $2 per pound last year. The macroeconomic conditions are also responsible for prices of cotton internationally not able to move northwards.

As per members of cotton association, worldwide the area under cotton has increased and this factor is also not helping the prices to move up.

Rathi however believes the prices of cotton would stabilise once the demand start picking up.

Source: http://www.business-standard.com/india/news/cotton-farmers-face-depressed-prices/457150/

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