With the current year cotton crop estimated to lower than projected, Gujarat-based ginning mills have been forced to rely on other state for their raw material. Currently, out of total cotton arrivals for ginning, almost 50 per cent cotton has come from Maharashtra, Andhra Pradesh and other cotton producing state.
"Every year only 20-25 per cent of cotton comes from other state to Gujarat for ginning as we have large number of processing units. But this year situation is different as our crop size has been reduced and most of the ginning mills are forced to source more than 50 per cent of from other states," said Anand Popat, secretary of Saurashtra Ginners Association (SGA).
According to Popat, farmers mainly from Saurashtra area have also restrained from selling cotton as they continue to seek higher prices. On the other hand, prices in other states have been low due to higher crop.
On an average, about 40,000 bales cotton arrives every day in Gujarat. Out of this, around 20,000-22,000 bales of cotton have been arriving this year from Maharashtra, Andhra Pradesh and Rajasthan as against around 8,000 bales last year. Price of cotton is ruling at Rs 850-900 per 20 kg here.
Arunbhai Dalal, an Ahmedabad-based trader and exporter, said, "Right now Gujarat farmers are not selling their cotton enough as they had seen Rs 951-1000 per 20 kg last year. Once prices will reach to this level, farmers will increase their cotton selling. But for now it is fact that we are very much depending on Maharashtra and Andhra."
According to Dalal, so far around 1.8-1.9 million bales of cotton has arrived in Gujarat, of which 700,000-800,000 bales of cotton came from other states. During this week, cotton price has increased on some good demand from mills. According to market sources demand will increase further as export demand in yarn is higher.
Cotton production in Gujarat is likely to be around 7 to 7.5 million bales in 2012-13 as against 12 million bales last year. Out of this, Saurashtra’s cotton production may not cross 3-3.5 million bales this year which is almost 50 percent less as compared to last year.