Despite the prediction of a good cotton crop this year, weak demand in domestic as well as international markets has rendered cotton markets unstable this year. As a result of this, ginners are running their factories on a limited time and the ginning activity is currently below 40-45 per cent due to slow arrivals and lower sales.
“Farmers are not bringing the crop in market as they want higher prices this year. Moreover ginners are encountering a disparity in the current price levels, which is why the ginning activity is lower by 40 to 45 per cent,” said Dilip Patel, president of All Gujarat Ginners Association.
The same opinion was given by the president of Saurashtra Ginners Association Bharat Wala who said, “We are losing about Rs 1,000-1,500 per candy at presently. If prices come down more and the arrivals increase then full fledged ginning work can be resumed.”
Gujarat has more than 1,000 active ginning mills but currently they are working for only five to seven hours every day. “We are expecting that arrivals will increase this month. On the other hand farmers are demanding a higher rate for their product. If we see last five year's price of raw cotton, then the average price is about Rs 650-700 per 20 kg. However, farmers expecting higher prices on the basis of what they received last season,” said Dilip Patel.
The raw cotton prices have continued to decline to almost Rs 150 to Rs 750-800 per 20 kg from Rs 925-950 in the past two months.
According to Cotton Corporation of India (CCI) data, till 27 November this year, about 43.10 lakh bales of cotton have arrived in India in comparison to 57.17 lakh bales in same period last year. The arrivals this season has declined by about 25 per cent as compared to last year.
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“Cotton market is not stable right now. All kinds of demand is weak and farmers expecting more prices of cotton which is not possible in this condition. We are all ready losing Rs 1,000-1,500 per candy and if prices continue to go up, then we cannot sustain our business”, said Bharat Wala.
He added, “We are getting 30-32 kg lint from 100 kg raw cotton while it should actually be 35kg from 100 kg. With low demand, low exports and weak domestic buying we do not see a point in running our gins for the full time. With all these factors affecting ginners this year, most ginners are running their business part time.”