Cotton prices soar in Punjab but farmers won’t benefit

Bathinda: A majority of the growers have failed to benefit even after a 10% per quintal increase in prices of cotton at the end of the 2018-19 cotton season. More than 90% cotton crop has been sold by farmers in three cotton growing states of north India and only a small number of farmers, who have the holding capacity are expected to get benefit.
The prices, which till few days ago were hovering around Rs 5,500-5,600 per quintal, are now fetching Rs 6,150-6,200 per quintal in less than a fortnight. It is the millers and traders who kept the stock with themselves are reaping the benefits of spurt in price. The minimum support price (MSP) of cotton for long staple 27.5 to 28.5 MM, which is grown in north India, is Rs 5,350 per quintal. The 10% shortfall in production of cotton across the country is said to be reason behind the increase of price.

Initially, the production of 360 lakh bales (1 bale =170 kilogram) was targeted in India. It has now been decreased to 325 lakh bales. According to cotton trading body Indian Cotton Association Limited (ICAL), nearly 94% crop has been sold by growers in the three Indian states of Punjab, Haryana and Rajasthan. Out of the estimate arrival of 62.82 lakh bales in these states, 58.97 lakh bales were sold till March 31. In Punjab, against an estimate of 9.15 lakh bales, 8.53 lakh bales were sold till March 31; in Haryana out of the estimate of 24.72 lakh bales, 22.32 lakh bales were sold; and in Rajasthan 28.12 lakh bales were sold against an estimate of 28.95 lakh bale arrivals.

Initial estimates prepared by ICAL reveal that cotton production in Punjab was expected to be 9.70 lakh bales. Now, the estimates have been lowered to 9.15 lakh bales. In Haryana, initial estimate was of 26.50 lakh bales, which is now expected to be 24.72 lakh bales; and in Rajasthan, initial estimate of 29 lakh bales has now been pegged at 28.95 lakh bales.

Initial estimate of cotton arrival in three states was production of 65.2 lakh bales, which has now been lowered to 62.832 lakh bales. Cotton was sown in 2.83 lakh hectares in Punjab, 6.50 lakh hectares in Haryana and 6.29 lakh hectares in Rajasthan.

“We held back the cotton crop till January, expecting increase in prices. But when these kept hovering around Rs 5,500-5,600 per quintal, we sold it. Although it was being said that the prices may increase at the end of the season, we could not hold it for long,” said farmers Gurdev Singh and Karnail Singh of Sangat village in Bathinda.

Another cotton grower Jasbir Singh from Khuia Sarwar in Fazilka district said as small farmers could not hold on to the crop for long, they had to sell it to raise money and the middlemen, who now have the crop, are reaping benefits. ICAL president Mahesh Sharda said, “The main reason behind increase in price is shortfall of production. Farmers who have not sold the crop till now, millers and traders are expected to reap benefit.” It is not only in India, but the production has witnessed shortfall in other cotton producing countries as well, he added.

State Target Arrival till March 31

Punjab 9.15 lakh bales 8.53 lakh bales

Haryana 24.72 lakh 22.32 lakh bales

Rajasthan 28.95 lakh 28.12 lakh bales

Total 62.82 lakh 58.97 lakh bales