Cotton prices up despite rain

D Gopi / Guntur November 30, 2010, 0:38 IST

Cotton prices in the open market this season have so far remained satisfactory, giving a sigh of relief to the growers. The incessant rain and flood that had marooned the fields initially dashed hopes of farmers as they feared that the crop would get discoloured and the price would fall drastically. However, the first round of sales that began in the third week of November saw farmers fetching remunerative prices as traders and millers picked up the product from various auction centres.

The Cotton Corporation of India (CCI) is still waiting at the auction centres for its turn to buy the stock at the minimum support price (MSP) of Rs 3,000 a quintal. Interestingly, the product is now being sold at the highest price of Rs 4,600 a quintal, which was recorded at the Adoni market yard in Prakasam district of the state. The price in the current season is ranging between Rs 3,500 and Rs 4,600 a quintal based on the colour. The cotton, which has lost its colour is getting slightly lower than the MSP. The discolour problem is only seen in the black cotton soil, which was affected by the incessant rains and water logging.

With the weather changing in the last two weeks, the first harvest from the black cotton soil has started arriving at the auction platforms. The harvest from the light black cotton soils and southern cotton soils that arrived at the auction platforms is doing well and the prices are more than the MSP. If the weather remains dry for the next couple of weeks, the prices are expected to cross Rs 4,800 to Rs 5,000 a quintal.
“We have positioned our personnel at all the auction platforms and if the price comes down near to the MSP, we would buy the product to support the farmers. But, as of now, farmers are on the safe side and there is no worry for them unless the crop gets discoloured or the moisture content increases beyond the permitted level of 8 to 10 per cent,” said CCI deputy general manager, S K Panigrahi.

This year, the CCI cleared 30 purchase centres in the state as against 39 in the 2009-10 season. The CCI had brought down its purchase centres mainly because the local spinning mills had increased their capacity and were buying more quantity.
The board has estimated cotton production at 32.5 million bales for the season 2010-11, as against 29.5 million bales in 2009-10. The increase in production comes on the back of increased acreage and the use of Bt seeds, the board said. Andhra Pradesh farmers are placed in a better position this season as the production in Gujarat, Madhya Pradesh and Maharashtra is expected to come down due to rains in the last two weeks.

So far, 4.6 million bales of cotton had arrived from various states by November 21, as against 4.8 million bales during the same period in 2009. Gujarat continued to top with arrivals in the current season at 1.4 million bales by November 21, followed by Maharashtra with 990,000 bales, Punjab with 542,000 bales and Andhra Pradesh with 530,000 bales. Last season, during the same period, arrivals from Gujarat stood at 1.8 million bales, followed by 550,000 bales from AP. The fall in arrivals from Gujarat this year, despite increased acreage, has been attributed to the heavy rains.

Source: http://www.business-standard.com/india/news/cotton-pricesdespite-rain/416589/