10-15% cotton area may shift to pulses, oilseeds

Weak cottom prices and crop damage from pests may prompt farmers to move to more remunerative crops

About 10-15 per cent of the area under cotton may switch to pulses and oilseeds this year despite predictions of a normal monsoon.

India had cotton sown on 11.99 million hectares in 2015.  Most cotton farmers sold their produce at Rs 750-900 per 20 kg between October and January. Cotton prices have since inched up to Rs 1,120 per 20 kg.

“Pulses, groundnut and sesame have provided good returns to farmers during the year. Cotton farmers have faced weak prices and crop damage from pests and this could reduce the area under cotton by 10-15 per cent this kharif season,” said Shirish Shah, a cotton trader from Mumbai and member of the Cotton Association of India.  Groundnut has traded in the price range of Rs 900-1,400 per  20 kg during the season. Pulses, too, have traded on the upside.  

FARMERS’ WOES

• Cotton farmers have faced weak prices and crop damage from pests, which could reduce the area under cotton by 10-15 per cent
   
• Minimum support price for groundnut, soyabean and pulses has been raised by Rs 190 per quintal, while the cotton MSP has been raised by Rs 60 per quintal

According to Shah, farmers in Gujarat, Rajasthan, Madhya Pradesh and Maharashtra may make the switch. Since May, demand for groundnut seed has risen in Rajasthan, Gujarat and Madhya Pradesh.

“Crop shifting happens every year, and this year it could be higher than last year. However, it is early to predict acreages,” said B V Mehta, executive director of the Solvent Extractors’ Association of India. The ending stock for the 2015-16 cotton year is expected to be 1.9 million bales against eight million bales in 2014-15.

There is also a lower likelihood of an increase in exports due to large stockpiles in China and other parts of the world.  “Prices of cotton between November 2016 and February 2017 could remain in the range of Rs 860-960 per 20 kg,” said M G Dhandhalya, associate research scientist at the department of agricultural economics in Junagadh Agriculture University.

“Farmers might reduce the area under cotton by at least by 15 per cent in hopes of better returns in the 2016-17 harvesting season,” he added.

The government has increased the minimum support price (MSP) for groundnut, soyabean and pulses by Rs 190 per quintal, while the cotton MSP has been raised by Rs 60 per quintal. Experts, said this, too, would lead to a change in crop choice for this kharif season.

According to the government’s third advance estimates, cotton production decreased to 30.5 million bales in 2015-16, from 34.8 million bales in 2014-15.