Vaghela tells farmers not to sell cotton early

Textiles Minister Shankarsinh Vaghela has asked the cotton growers of Gujarat to hold on to their stocks as long as they could, as the global prices of cotton were likely to appreciate soon.

Speaking at a press conference on Saturday, he said this year the produce of the crop is likely to register a sharp decline the world over. He added that China will import cotton from India, as the country has faced losses of around 25 lakh bales of the crop.

"Farmers are requested not panic and hold back the stock as the Cotton Corporation of India (CCI) has already set up procurement centres at major marketing yards in the cotton-growing regions of the country to buy the commodity at Minimum Support Price (MSP)," said Vaghela.

The Ahmedabad branch has around 39 centres 22 of which are under operation - and the Rajkot branch has around 20 centres, of which 17 are operational, he added.

India is projected to have a bumper crop of about 243 lakh bales against 242.50 lakh bales last year.

This, despite the area under cotton cultivation, which was 89.20 lakh hectare during 2004-05, having slightly gone down to 88.17 lakh hectare during 2005-06, according to the minister.

Gujarat alone is likely to produce 80 lakh bales this year against 73 lakh bales in 2004, Vaghela said, adding that in the state, the area under cultivation has gone up by nine per cent in 2005-06 at 20.77 lakh hectare against 19.06 lakh hectare the previous year.

Last year, the CCI had purchased 27.55 lakh bales at MSP wherein the central government incurred a loss of Rs 375 crore. In Gujarat, the CCI had purchased 4.83 lakh bales and incurred a loss of Rs 40 crore.

"But this year, due to a good crop, prices are expected to be at MSP-level initially. Cotton prices in Gujarat have been ruling at MSP-level since the beginning of the season. The CCI has commenced MSP operations in the state from November," he added.

CCI Managing Director Subhash Grover also claimed that negotiations are going on with a Chinese delegation in New Delhi and it might materialize into India exporting cotton to China "" a major textile exporter "" in a big way.

"As Gujarat is also producing Shankar 6, China is eager to purchase the same," he said.