Cotton rates at an all-time high but no bonus for Vid’s farmers

Nagpur: Anup Chavan at Bod Bodhan village of Yavatmal has grown cotton in 25 acres this season. With prices for raw cotton touching an all-time high of over Rs 8,000 a quintal, Chavan says he would just be able to break-even.
Bod Bodhan was also infamous for suicides. Along with other farmers he is planning a protest against delay in payment of state government compensation for losses due to rains.
The trend has also left traders puzzled. A high demand of yarn due to a pent up demand for garments is being quoted as the reason for high cotton prices.
Traders also point out at speculation in the international market as a reason, fearing a correction.
Amid the frenzy, farmers in Vidarbha say the record high hardly brings a bonanza for them. Extended rains have brought down the yield. So, if international factors have pushed rates for cotton, the main crop of the region, it may only save farmers from another crisis, say sources.
Chavan says he expects to yield not more than 3 quintals an acre from his 25-acre farm. At Rs 8,000 a quintal, he stands to get Rs 24,000 from each acre, just enough to cover the expenses. Last year he yield 10 quintals from an acre. Selling at Rs 5,800/quintal got him Rs 58,000. “The soyabean yield is higher but the rates are moderate,” he says.
Chavan says he hopes to harvest around 10 quintals of soyabean from 15 acres. The rates are at Rs 3,500 a quintal, he said. He is waiting for prices to improve and hold on to the stock. However, the net results from both cotton and soyabean are not very encouraging, he says.
Ganesh Nanote of Nimbarna village in Akola said his yield has come down to 6 quintals as against 10 last year. The high rates will only get him a couple of thousand more. Soyabean is better this year and he hopes that his net earnings from the crop may be higher by Rs 5,000 an acre. However, the final tally comes out to be same as 2020, he says.
Arun Sekshasria of M/s DD Cotton, an export firm, said the increase in cotton prices has been purely fueled by speculation. There is not much export demand for the commodity.
Vinay Kotak, director of Kotak Ginning and Pressing at Mumbai, said the rally is due to a mix of speculation and fundamental. There are reports of pent up demand after Covid. There is also an increased fund-based buying in the exchanges. A demand resistance has been created due to high prices and a correction appears to be imminent
Veteran farm activist Vijay Jawandhia said rates of cotton bales in India are almost at part with the international level. This rules out any competitive advantage for exports.
Back in Yavatmal, Sahebrao Pawar says the cotton yield is too less to last very long. Even the cost of cotton plucking has gone up.