MP yarn producers concerned over cotton MSP hike

The recent hike in the minimum support price of cotton has started adversely affecting the cotton ginning and pressing industry in Madhya Pradesh. The industry has expressed concern that its businesses would suffer due to the open market as well as challenges from the US market. The hike would also adversely affect the cotton farmers as industries are unlikely to lift the commodity from mandis.

Though cotton has already arrived in the market, the commodity with moisture, short length and poor strength has not been able to attract more than Rs 2,200 a quintal in mandis in western Madhya Pradesh — one of the country’s primary cotton growing belts.

“We are procuring cotton at Rs 25,000-26,000 per ‘khandi’ (a bale of 356 kg or 784 pounds cotton), while imported cotton is available at Rs 21,000 per khandi. Millers have bought tonnes of ginned and pressed cotton through futures of the next 15 days but the rates may go up as high as 28,000 per khandi if we procure cotton at Rs 3,000 per quintal. We fear the millers (yarn producers) may refuse to purchase from us and start importing,” said Gopal Tayal, secretary, Madhya Pradesh Cotton Processors and Traders Association.

Ginning and pressing mills in Khandwa, Pansemal, Khetia, Kasrawad, Barwah, among others, in western Madhya Pradesh have been facing stiff competition from other mills in the state.