The cotton season this year has started on a promising note in Andhra Pradesh with farmers earning Rs 2,800-3,200 per quintal. The price is expected to go up in the coming days and touch an all-time high of Rs 4,000 plus per quintal.
In fact, when the first crop arrived from Proddutur, Giddalur, Vinukonda, Macherla and Adilabad into markets, the price was at Rs 3,100 and rose to Rs 3,500 per quintal.
The spurt in cotton prices has been backed by the Cotton Corporation of India (CCI), which has announced Rs 3,000 as the minimum support price (MSP). The last year’s MSP was just Rs 2,050. The Maharashtra Cotton Growers’ Federation has also stated that it would buy cotton at Rs 3,500 per quintal.
While least quality and short staple cotton lint (seedless) attracted Rs 24,500 per candy, high quality and long staple received Rs 28,000 per candy. However, spinners lost Rs 1 lakh per lot (100 quintal) due to cost escalation in yarn production.
The CCI has estimated the crop area at 1.3 million hectare in the state over last year’s 1.1 million hectare. The harvest is expected to increase 15 per cent at around 5.5 million bales, compared with last year, said PA Ghate, branch manager, CCI.
Accordingly, the corporation has opened 32 purchase centres — 9 each in Guntur and Khamman districts, 5 each in Krishna and Nalgonda districts and 4 in Prakasam district.
Andhra Pradesh Cotton Association (Apcto) president G Punnaiah Chowdary said that around 5,000 cotton bags hit the market every day. The season would pick up after Dasara. One more rain before Diwali and the crop size would touch 7 million plus bales.
He said despite remunerative prices, many farmers left chilli cultivation due to laborious work involved in growing that crop and took up cotton. This year, almost all the farmers went for Bt-2 cotton, which is expected to give extra yields. Though seed rate went up from last year’s Rs 1,100 to Rs 1,400 per quintal now, cotton has emerged as the top commercial crop in Andhra.
Moreover, traders of Maharashtra, Madhya Pradesh and even Gujarat are descending on the AP border districts to purchase cotton as crop quality in those states has suffered. Besides, crop size in Punjab may decrease 20 per cent, while in Gujarat and Maharashtra it may decline 10 per cent.
World markets too are favourable as crop quality in Egypt, China, Bangladesh, Sudan, Pakistan and the US is poor, said M Santosh Kumar, a trader and ginner.
Attracted by last year’s profits, entrepreneurs have established over 150 new ginning mills in and around Guntur alone. Last year, the crop harvested was enough for only five months for about 1,000 mills in Andhra.
Despite the increase in harvest, the crop might be enough for only four months this year. Under the circumstances, small ginners would not survive, Kumar added. In a normal year, players witness more exports at the yarn stage. But last year most of the exports (40 per cent) took place at the lint stage itself. The same trend is likely to continue this year, impacting spinners.
Farmers hope to sell their entire crop before the Lok Sabha elections as they fear the price might crash to Rs 2,000 per quintal after elections.
