Financial Daily from THE HINDU group of publications
Wednesday, Mar 20, 2002
Agri-Biz & Commodities
Poor offtake, low prices worry cotton growers
HYDERABAD, March 19
COTTON growers in Andhra Pradesh are now in a quandary as the prices have fallen below the minimum support price and the offtake has been poor lately.
Though the Cotton Corporation of India and other regulatory agencies have stepped up procurement in the State, there have been instances of agitated cotton growers creating unrest in the marketing platforms, particularly so in Karimnagar, a cotton-growing centre.
The incident of unrest in Karimnagar last week came to light as the CCI did not pick up the produce. Following this, the State Government directed the State marketing federation, Markfed, to intervene and push up purchases, according to the State Minister for Agriculture, Mr V.S. Rao.
The Minister said that cotton crop was cultivated in about 10 lakh hectares in the State and 25 lakh bales (170 kg each) of cotton production were expected. .
Following a request by the Chief Minister, Mr N. Chandrababu Naidu, CCI entered the market and commenced procurement operation through 59 purchase centres. Following this, about 4.50 lakh bales have been procured and it is estimated that about 8.5 lakh bales are now with the growers.
Though the Government has claimed that the MSP is pegged at Rs 1,675 to Rs 1,875 per quintal for FAQ (fair average quality) grade kapas for different varieties, it is now gathered that the prices are ruling below this level and in fact, private traders are picking it up at about Rs 1,200 - Rs 1,400 per quintal based on the grade.
One of the reasons given by the State Government for the problem is the existing duty structure. Due to adverse international market situation and to discourage imports, the State Government has requested the Centre to enhance the import duty to 25 per cent to ensure that imports are reasonably restricted.
Further, the quality of lint in terms of staple length and micronaire may come down with every picking made during the crop growth period. As a result, the quality parameters for the kapas of fourth picking may be poor and CCI may be cautious in picking up stocks, Mr Rao maintained.
In Karimnagar district, the crop has been cultivated in an area of 88,600 ha and a production of 8.86 lakh quintals of kapas was expected in 2001-2002. Thus far, 6.86 lakh quintals were purchased by CCI, Markfed and private agencies put together.
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