Cotton prices record new high in AP

Cotton prices in the state have touched a new high in the state with prices touching Rs 3,000 per quintal. This is in sharp contrast to the last two years when prices were below Rs 2,000 per quintal. The season has witnessed average cotton prices of Rs 2,500 per quintal.

Surprisingly, despite crop yields being high this year prices have continued to rise. Market sources attribute this phenomena to higher exports from the country, especially to China.

A factor that contributed to the higher cotton production in the state was the absence of any major pest problem that affected cotton crops in previous years.

An official in the marketing department pointed out that the higher cotton prices and the savings on pesticide costs have ensured that the average farmer will earn much more this year.

As of 5 February 2004, about 30.92 lakh quintals of cotton have been sold in eight major market yards in the state since October last. October is the month when cotton arrivals begin.

The government marketing department records annual arrivals from the month of October to the month of September next year. Last year only 30.18 lakh quintals were sold up to September 2003.

According to marketing department officials, though arrivals continue till the February-March period, there is still seven months time left for the current year's cumulative total to grow.

The Cotton Corporation of India (CCI) has so far purchased about 8.5 lakh quintals of cotton this year in the state.

The average cotton prices in the last three to four months have been about Rs 2,500 per quintal which was well above the minimum support price (MSP) announced by the Government of India this year.

The government support price for inferior quality cotton is Rs 1,725 per quintal while it is Rs 1,925 per quintal for superior quality cotton. From January this year, rates have been oscillating between Rs 2,760 to Rs 2,800 per quintal.

Major markets for cotton business in the state include Adilabad, Bhainsa, Jammikunta, KarimNagar, Khammam, Adoni, Warangal, Parkal.

Some of the markets like Warangal receive cotton arrivals through out the year, while the Adilabad market also receives cotton from bordering districts of Maharashtra in huge volumes.

Arrivals at major markets and the purchases being made by CCI may not reflect the volume of total production in the state as there are other small markets and purchases other than this.

At the state level, the marketing department monitors only the arrivals and purchases at the eight major markets.

According to P Narayana Chowdary, the additional director of AP Agriculture Commissionerate, about 18 lakh bales had been produced in 2003, which is about 30.60 lakh quintals. But ginning mill operators peg production estimates higher by about six lakh bales, Chowdary told Business Standard.

According to Chowdary, the per hectare yield levels have gone up from 291 kgs (after taking out the lintel) in 2002 to 300 kgs in 2003.

But the unofficial assessment arrived at by the mill owners put the yield levels at 387 kgs per hectare while the Directorate of Economics and Statistics officials put the yield levels at just 170 kgs per hectare, which the state agriculture department strongly disapproves.

According to the agriculture department officials, the higher production and higher yield levels were mainly due to the good monsoon that was experienced in the last Kharif season.

"The even distribution of rains throughout the season has greatly helped the cotton crop to give higher yields," said Chowdary, who monitors crop conditions in the state.