Ginners close units as cotton arrivals dip

As short supply of raw cotton has raised raw material prices, in turn increasing the cost of production for cotton ginner, nearly 80 per cent of ginning units in Gujarat are shut since last month. The remaining are working part-time.

Thanks to lower arrival and raw high cotton prices, 700 to 800 units are not working now, say industry sources. Market estimates put the total number of ginning units in the state at around 1000. The units usually operate till April.

"High price of raw material is the main reason for this situation. We are losing around Rs 2500-3000 per candy (1 candy=356 kg) since February. As a result, almost 80 per cent of ginning units are closed in Gujarat and rest are working part time", said Dilip Patel, president of All Gujarat Ginners Association.

Cotton prices had increased from Rs 41500-42000 per candy at the beginning of season to Rs 60000-60500 per candy in February. Currently, cotton prices are hovering around Rs 58000-58500 per candy.

Around 30,000 bales arrive per day in Gujarat and 75000 bales arrive in India. The average arrival of cotton were around 50,000 per day in February. The state has a production capacity of 3.2 crore bales per annum. Saurashtra Ginners Association president Bharat Vala said, "Farmers are not willing to sale raw cotton at a lower price. On the other hand, mill demand has reduced due to high cotton price."

According to Vala, there are about 15 to 17 lakh bales of unsold raw cotton is available with farmers in Gujarat. "Farmers are holding back on speculation prices will rise. Traders are bidding on hopes of further rise and buyers also seem to be in some sort of panic," claimed Arvind Raichura of Balkrishna Ginning Industries.