A decrease in cotton production and higher inflow of unprocessed cotton seed oil from other states this season has forced cotton seed crushers in Gujarat to cut down operations by 40 per cent.
As per industry sources, units which were crushing 350-400 tonne cotton seed last year are only able to crush 250-300 tonne this year. This is mainly because of oil millers sourcing unprocessed cotton seed oil from states like Andhra Pradesh and Maharashtra as the prices are lower than Gujarat. Since demand for oil is less the crushers are getting less orders.
“This year cotton production in Gujarat is estimated to be lower than last year. Due to this cotton seed availability has decreased in the state and as a result price of cotton seed here has gone up," said Praful Patel, vice president of Gujarat Cottonseed Crushers' Association.
"Compared to Gujarat cotton seed price in other states is lesser by Rs 10-15 per 20 kg so millers are buying unprocessed cotton seed oil from those states mainly Andhra Pradesh," Patel, who is also a vice president of Saurashtra Cottonseed Crushers' Association said.
According to Patel, Gujarat needs around 700,000 tonnes cotton seed for crushing every year. "Against the demand, this year we are expecting only 300,000 tonnes cotton seed output," he added. "At present, around 250 tonne of cotton seeds are crushed per day in Gujarat," he said, adding that last year these same units used to crush 350-400 tonne of seeds everyday.
“As we have a lesser amount of cotton seed and inflow of unprocessed oil from other states has increased this season, most of the crushers have cut down operations by 40 per cent," Patel said.
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Since last three years cotton production in Gujarat was more than 10 million bales but this year due to poor monsoon, cotton production in the state is expected to be around 7 million bales.
Cotton oil wash (unprocessed oil) price in Gujarat was ruling at Rs 615-620 per 10 kg while the same oil in other states was trading at Rs 600-605 per 10 kg. Gujarat cotton seed price was around Rs 360-365 per 20 kg while in other states the seed cost Rs 335-340 per 20 kg. There are about 800 cotton crushers in Gujarat.