JAU report forecasts raw cotton, groundnut price rise

As per a price forecast report by the Junagadh Agriculture University (JAU), prices of groundnut and raw cotton crops are likely to firm up during the November 2015 to January 2016 period. The price rise is likely to be led by lack of quality crops as well as growth in domestic and export demand for the same.

The econometric analysis done by the research team of Department of Agricultural Economics of JAU revealed that price of raw cotton to be in the range of Rs 840 to 920 per 20 kg for the said period which at present traded on Rs 825-880 per 20 kg in various markets.

 

Apparently, based on its forecast, the university has advised farmers to hold raw cotton (known as 'kapas') and groundnut till January 2016 to get better return on their crop.

"Price of kapas may improve during November, 2015 to January, 2016 mainly on the back of expectation of lower production. Add to that, quality cotton has been lacking after the crop was damaged due to diseases which may also push the price further. We have suggested farmers to sell kapas after January next year," said Maganlal Dhandhalya, associate research scientist, department of agricultural economics, JAU.

Quoting the Ministry of Agriculture's first advance estimates, the JAU report has estimated cotton production in country to stand at 33.5 million bales for 2015-16 as against 35.47 million bales in previous year.

The reduction in cotton production is being attributed to decline in acreage from 13.08 million hectares in 2014-15 to 11.7 million hectares in 2015-16 as well as poor monsoon condition in major producing states such as Gujarat, Maharashtra, Andhra Pradesh and Karnataka. Besides, severe damage by white fly has been reported in states of Punjab and Haryana.

"In current year the cotton production and consumption are expected to be almost same at around 33 million bales in the country, apart from last year's ending stock of about 3.5 million bales. Hence, if exports remain at par with last year, price may further improve," said Dhandhaliya.

Similarly, the report suggests groundnut of small variety may touch the range of Rs 820 to Rs 900 per 20 kg and bold Rs 860 to Rs 940 per 20 kg during November, 2015 to January, 2016. Currently, groundnut prices are ruling on Rs 800-860 per 20 kg.

"While the onset of monsoon in Gujarat monsoon was timely in the fourth week of June and continued till third week of September, a one and half month dry spell in August-September badly affected groundnut crop at pegging stage. This will result in below normal yields which may translate into lower production," said Dhandhaliya.

Meanwhile the report pegged area under groundnut during the current kharif season in India at about 3.91 million hectares which was same as last year's 3.93 million hectares. Similarly, groundnut production is also estimated to be the same as last year at about 5.1 million tonnes, as per first advanced estimate by Government of India.

Yet again, the dry spell in August-September badly affected groundnut crop at pegging stage, which will result in below normal yields mainly in Gujarat.