Cotton: The shine of white gold has faded, the price fell below MSP in Muhurat deals, the faces of the farmers are gloomy,
The Muhurat sale of cotton in the new season has not been good for the farmers, as they have got prices about Rs 1500 per quintal less than the MSP. In the Muhurat deals held on Friday in the mandis of Anjad and Khargone in Madhya Pradesh, cotton was sold at the rate of Rs 6,500 to Rs 7,100 per quintal. At the same time, the government has fixed the MSP of cotton at Rs 8,110 per quintal.
The Muhurat sale of cotton in the new season has not been good for the farmers, as they have got prices about Rs 1500 per quintal less than the MSP. In the Muhurat deals held on Friday in the mandis of Anjad and Khargone in Madhya Pradesh, cotton was sold at the rate of Rs 6,500 to Rs 7,100 per quintal (Cotton Prices). At the same time, the government has fixed the MSP of cotton at Rs 8,110 per quintal.
Effect of removal of import duty Traders say that this decline was certain. The main reason for this is the government's abolition of import duty on cotton till 30 September and later extending this exemption till 31 December. Muhurat sale is a symbolic beginning of the arrival of cotton from the fields, but it also indicates future trends.
Possibility of government intervention Current trends are indicating that the rates in the open market may remain much below the MSP. If such a situation arises in the coming days, then the Cotton Corporation of India may have to intervene and buy the produce from the farmers at MSP. Let us tell you that the corporation buys raw cotton from the farmers and sells the processed bales to the traders. Recently the corporation has reduced its sales rates even further, due to which there is a bearish trend in the rates of raw cotton.
Economic mathematics of farmers According to TOI, Kishore Tiwari, former director of a government think tank, says that to make a profit by selling cotton at MSP, farmers should get a yield of at least six quintals per acre. Due to reasons like natural disasters, the yield is constantly decreasing. The cost of cultivating one acre of cotton is about Rs 24,000 to Rs 30,000. By selling 6 quintals of produce at MSP of Rs 8,110, the farmer gets a profit of only Rs 18,000 to Rs 24,000. This meager profit keeps the farmers in financial trouble throughout the year.
