Vidarbha Cotton Growers Benefit from Global Cotton Shortage: Cold Weather in China and Low US Yield Drive Prices Up

By 2024-03-04 11:00:41

Vidarbha Cotton Growers Benefit from Global Cotton Shortage: Cold Weather in China and Low US Yield Drive Prices Up

Severe cold weather disrupting crop cycles in China and a decline in yields from the US have unexpectedly benefited cotton growers in Vidarbha. Presently, they are fetching prices slightly above the minimum support price (MSP) of Rs 7,020 per quintal. However, this positive turn may come too late for most farmers who already sold their cotton at prices below MSP earlier in the season.

Sources report that the extreme cold in China and reduced acreage in the US have contributed to a global shortage of cotton, leading to prices exceeding MSP in Vidarbha. Despite the current increase, it falls short in comparison to the Rs 13,000 per quintal achieved in the 2022 season.

The harvest season in Vidarbha began in October with low yields and poor rates due to unseasonal rains damaging the crop. Farmers had to settle for lower prices in the open market. However, within a month, market rates have risen by ₹1,000, reaching ₹7,400 per quintal in Yavatmal on average and over ₹8,000 in Akot tehsil of Akola district. Reports of low global stocks have further fueled these rates.

Manish Jadhav of Swabhimani Shetkari Sanghatana noted that over half of the farmers have already sold their stocks, and in some marketplaces, rates are only marginally above the MSP.

Traders caution that although rates are currently higher, they may not sustain their peak levels for long. International prices, which touched $1.05 for a pound of lint, have now settled at 97 cents, still keeping prices above MSP for Vidarbha farmers.

Prashant Mohta, the managing director of Gimatex Limited, cited extreme cold weather affecting output in China and a fall in US yields as factors influencing the market. The bullish demand for garments in China has driven processed cotton prices from ₹58,000-₹59,000 to ₹62,000 per candy, subsequently making raw cotton sold by farmers more expensive.

Farm activist Vijay Jawandhia suggests that the government should incentivize cotton exports to further boost rates. He emphasizes that the current increase is primarily due to international factors, while the prices of cotton seeds remain on the lower side domestically.

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