NAGPUR -- A bumper cotton crop is expected in the state this year which is likely to bring cheers to growers in the Vidarbha region too, Maharashtra State Cotton Growers Co-operative Federation chairman N P Hirani has said.
Cotton prices have ruled firm as the new season opened with steady flows of raw cotton.
Vidarbha has the largest area under cotton cultivation in the state and the cash crop has an influence on its rural farm economy in a big way.
This year, the yield is expected to be between 350 and 380 lakh quintals against 300 lakh quintals last season, Hirani said.
Last week, private traders started purchases and have already collected about 1.5 lakh quintals at rates fluctuating between Rs 4,150 and Rs 4,450 a quintal, way above the central government-fixed minimum support price (MSP) of Rs 4,100.
The Maharashtra State Cotton Growers Co-operative Federation has decided to open procurement centres from November 15.
However, an official announcement on this is likely only on November 9 or post Diwali, after the federation's board meeting in Mumbai, Hirani said.
Interestingly, the cotton prices in the coming days would largely depend on China. If the neighbouring country opens up for imports, Indian cotton growers can expect a good demand and consequently higher rates through exports.
There is a two per cent incentive of exports. But China exports are not a certainty because of economic slowdown there, sources in cotton industry said.
China built a huge inventory couple of years back by purchasing from all over the world. Hopefully, that stock may have exhausted.
"Cotton is generally not stored for more than two years. So, there is possibility of opening of imports this year," said Hirani. However, otherwise, he is sceptical about the sustainability of the current high rates.
"We expect supplies to jump up after November 15, triggering a slide in rates. At that juncture, the federation will be ready to intervene and start purchases at its centres to ensure that private traders do not exploit farmers and prices do not slip below the MSP," the former NCP MLC said.
Yesterday, the Sarki (cotton seed) rates fell by Rs 250 to Rs 2,050 a quintal. This is an indication that raw cotton prices may also see a slump in coming days, he said.
Hirani said in any case the federation does a nominal buying. Last season, it purchased only 26 lakh quintals.
"This year we will be in the market as sub-agent of Cotton Corporation of India and open procurement centres first at all district headquarters. If needed, we can expand the network to taluka centres at short notice looking to the situation. Last year, the federation had opened 88 centres," he said.
Dues totalling Rs 11,000 crore of farmers were cleared by the federation last year, he claimed.
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