Farmers put cotton sales on hold on low return, weak demand

With farmers reluctant to sell cotton because of low return on the cash crop, cotton arrival in the current cotton year (October-September) is down by 50 per cent as against last year.

According to sources in the cotton industry, demand for exports is weak this year, as a consequence of which, price of the crop is not improving.

Cotton arrival in Gujarat has reduced from 65,000-70,000 bales (one bale is 170 kg) per day in November 2013 to about 33,000-35,000 bales per day in November 2014.

Country's total cotton arrival currently stands at 90,000-105,000 bales, down from last year;s 200,000 bales.

Attributing low cotton sales to weak demand, Arvind Patel, vice-president, Saurashtra Ginners Association (SGA), said, "Cotton season was late this year but the biggest factor is weak demand, which has pushed the crop's price downwards. Export buying is nil and mills are also buying as per their requirement."

Price of Gujarat Sankar-6 cotton is ruling at Rs 33,000 per candy (one candy is 355 kg), down from last year's price of Rs 40,500 per candy. Raw cotton is presently priced at Rs 800-820 per 20 kg as against 1,000-1,050 per 20 kg last year in the same period.

Arun Dalal, an Ahmedabad based trader and exporter said, "Cotton farmers are reluctant to sell cotton as they are not getting expected return compared to last year. Weak exports from the country has pulled down the crop's price."

He said price has got some support after the Cotton Corporation of India (CCI) entered the market for procurement.

So far, CCI has procured about 600,000 bales of cotton from across the country while last year it had purchased about 475,000 bales.

During new season, so far about seven million bales of cotton arrived in the market in the country, lower by three million bales from last year's 10 million bales.