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Vidarbha cotton farmers may be hit as dragon reduces imports |
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NAGPUR: For Vidarbha's cotton growers, this may be the worst year despite a bumper crop estimated across the country. The good crop has led to prices falling below Rs4,000 a quintal, which is the average minimum support price (MSP). Farmers with high yield may be able to recoup some losses from low prices, but the long, dry spell in Vidarbha is expected to reduce yield, which is even otherwise on the lower side.
Even as global factors add to a slump, alleged curbs proposed on MSP buying could further increase the farmers' woes. One of the agencies procuring at MSP is Maharashtra Cotton State Federation, which is affiliated to the National Agricultural Cooperative Marketing Federation of India Limited (NAFED). NP Hirani, the state federation's chairman, said certain conditions put forth by NAFED have indeed left them discouraged.
For the first time, NAFED has proposed that no farmer should be allowed to sell more than 25 quintals a day. It has also mooted that the federation's MSP purchases should not exceed 25% of the output in its area of operations, and the procurement exercise should be wound up within three months. To buy more than 25% of the output, fresh permission will have to be sought from NAFED.
However, NAFED chairman VR Patel refuted having laid down any such condition, adding that a final decision on MSP procurement is yet to be taken. However, Hirani reiterated that NAFED had clearly communicated these conditions. "If they have relaxed it later, we are happy indeed," he said.
Hirani confirmed that even as markets have not fully opened, early arrivals are being quoted at Rs3,500 to 3700 a quintal and the rates are expected to remain bearish. The federation has demanded that the MSP should be taken to Rs6,000.
Farm activists say NAFED conditions will only help the textile lobby, which will be able to mop up the remaining stock at lower rates. Vijay Jawandiya, who criticized the NAFED stance, said rather the government should discourage exports by imposing a duty.
Market sources say the biggest reason for the price slump in India is cut on imports by China, which is a major buyer of Indian cotton. As against the regular average of 1.5 lakh tonnes, Chinese buying is down to less than 50 lakh tons, said Arun Seksharia of M/s DD Cotton, a Mumbai-based export house. This has also led to a fall in the rates of yarn, the raw material for the textile industry.
Cotton rates have halved to 68 cents a pound internationally during the last six months. At the same time, the cut on imports by China has further added to the slump in India.
"Globally, a surplus cotton stock of 22 million tons is estimated for this year. In India, the production may cross 400 lakh bales. Adding the carry forward stock and imports, the domestic cotton supply could stand at 460 lakh bales. After optimum consumption, a surplus of over 160 lakh bales may remain in India," said Hirani.
Source : timesofindia.indiatimes.com
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