Cotton prices likely to remain 'low' on good yield

Problems for cotton growers in Punjab and Haryana, who have faced extensive damage to their crop by whitefly attack, may further compound as cotton prices are likely to remain "low" on the back of overall good crop yield and lower yarn prices.
Industry experts said raw cotton prices are also unlikely to remain higher this season as textile sector in the country was not in good shape.
"Cotton prices are not going to go up this season despite there is crop damage in Punjab and Haryana due to whitefly attack. The reason behind it that there is an oversupply of crop in global market and yarn prices are also depressed," North India Cotton Association President Mahesh Sharda told PTI today.

According to traders, the raw cotton prices at present are ruling at Rs 3,700-3,750 per maund (37.324kg) in Punjab which is about Rs 600 per maund lower than the rate prevailing in last year and there is a possibility of prices not rising.
As cotton started arriving in mandis in Punjab, seed cotton prices are ruling at Rs 3,700-4,200 per quintal.
Cotton MSP is Rs 4,100 per quintal for long staple and Rs 3,800 per quintal for medium staple for 2015-16 season.

Notably, last season cotton farmers received shock as they got Rs 3,900 to 4,600 per quintal in rates as against their expectation of more than Rs 5,000 per quintal.

"If you see globally, there is an oversupply of cotton. Moreover, in India, the cotton output is expected at 370 lakh bales despite 8 per cent less acreage as there is likely to be higher crop yield," said leading textile company Vardhman Textiles Limited, Director, I J Dhuria said.
Pointing out that textile sector in the country was "not in good shape", he said the prevailing low yarn prices would also have impact on fresh cotton prices.
"Yarn market is quite depressed at present, posing serious problems for spinning mills," Dhuria said.
Asked whether there will be any impact of extensive damage to cotton in Punjab and Haryana because of pest attack, Dhuria replied in negative. "Rates at one place cannot be abnormally high," he said.

Whitefly attack has caused massive damage to crop in Punjab and Haryana, prompting the state authorities to take steps to bail out affected growers.
In Punjab, 20-25 per cent of cotton crop area of 4.50 lakh hectares in Punjab was under the grip of whitefly while 80 per cent of area 5.80 lakh hectares of cotton area in neighbouring witnessed pest attack.
In Punjab, farmers over 11,000 acres of land have even uprooted their damaged crop in affected areas of Muktsar, Fazilka, Bathinda, Mansa, Faridkot and Barnala districts.
However, industry insiders said that the combine cotton output of Punjab and Haryana was likely to be 32 lakh bales this season as against 35-36 lakh bales last year.

"Punjab and Haryana governments should now look at how to compensate growers hit by whitefly attack," he said.
The Punjab government had already announced to conduct 'Girdawari' (crop loss assessment) in affected districts of the Malwa belt.