Coronavirus hits cotton rates in Vidarbha

NAGPUR: Coronavirus outbreak in China is having an effect on the cotton growers of Vidarbha too. Rates of cotton — the mainstay crop of Vidarbha, have remained bearish, and farmers are now largely depending on the government purchase at minimum support price (MSP) of Rs5,550 a quintal.
As private traders continue to buy at lower rates, chances of open market rates crossing MSP are slim due to absence of Chinese buying, which has been hit by the coronavirus outbreak.
China is one of the major buyers in international market. The virus outbreak has hit logistics in China, even blocking exports of cotton consignments from India. This has in turn further dampened the rates in India. Traders said Chinese demand could have taken the rates up, at least crossing the MSP in the private market.
A major chunk of cotton supply has been taken away by the government procurement mechanism, which is still not being offloaded in the open market. Though sizeable supplies have been sucked out of the market, rates of raw cotton have not inched up, leaving the farmers to settle at MSP. The price is even less if a farmer goes to private traders who are not offering more than Rs5,200-5,300 a quintal, said sources in the business.
“At present, CCI has at least 65 lakh quintals of cotton in its stock. Normally even 20 lakh quintals getting mopped up by a single player can move the prices. However, the rates are stagnant this time. It is mainly because of China. Despite supply being affected, there is no proportionate demand to take the prices up. This demand could have come from China, where business has come to a standstill,” said Roshan Kothari, director at the Agriculture Produce Marketing Committee (APMC), at Wani in Yavatmal district.
Pawan Singhania, a cotton trader from Wardha, agreed, saying that demand from China could have provided some push in the rates a farmer would have got. There is an overall slump in the country, even the power looms at Ichalkaranji have shut down since a week due to problems dogging the industry, he said.
Farm activist Vijay Jawandhia says Chinese demand may indeed pull the prices up, but it would only be a saving grace, because of a global slump in the market, and the government needs to intervene. “Last year, cotton prices were higher because of a demand for cotton seed, which is used as cattle feed. Last year, cotton seed fetched nearly Rs4,000 a quintal which is half now. I have written to chief minister Uddhav Thackrey to grant a Rs1,000 per quintal bonus to cotton growers in line with paddy,” he said.
Sudhir Kothari, chairman of Hinganghat APMC said, the CCI purchases have not helped in buoying the market, and China is one of the factors.