The farmers of Punjab are reaping rich dividends, as the prices of cotton continued to rule high now due to less arrival of the commodity in different mandis of the state, compared to what the mandis received at the same time last year. There has been a 23 per cent decline in the arrival of cotton in mandis of the state as on December 31, 2009, as compared to the corresponding period last year. On account of less arrival, the average price of medium staple cotton in the state is ruling above MSP of Rs 2,800 per quintal.
According to the data compiled by the Mandi Board, the average price of cotton is hovering between Rs 2,850-3,400 per quintal. In some cases it was also being traded at Rs 3,505 per quintal. According to the data as on December 31 this year, 428,000 quintals (approx 860,000 bales) of cotton arrived in the state mandis as compared to 5.58 million quintals (1.11 million bales) during the corresponding period last year. Considering the data, there has been a shortfall of 23 per cent in the arrival as compared to last year.
Experts mentioned that the farmers were able to get better price of their produce due to the entry of the Cotton Corporation of India (CCI). Earlier, in absence of CCI, the average price in the cotton markets in the Malwa region (one of the prominent cotton belts in Punjab) was quoted much below the MSP of Rs 2,800 by private traders. According to sources, prior to entry of CCI, cotton was being traded in various mandis of the state about Rs 200-Rs 300 less than the announced MSP.
However, this procurement season, textile mills and private traders are dominating the procurement, unlike last year when procurement was dominated by CCI. The private traders and millers managed to procure 3.78 million quintals this year (as on December 31) as compared to 2.57 million quintals last year. The CCI has taken a backseat and procured 494,000 quintals this year, whereas it had procured 3.01 million quintals during the corresponding period last year.
Traders anticipate that in near future the price of cotton would further head towards north.
It is worth noting that this year Punjab has brought 536,000 hectares of area under cotton crop against 527,000 hectares last year, posting a jump of two per cent.
Further, the state is expecting to achieve cotton output of 9 million quintals this procurement season as against 7.4 million quintals last year, according to the state government estimates. The area under cotton surges this year because cotton growers got handsome prices of their produce in the wake of hefty hike made in cotton MSP by the Centre last year.