The Hindu Business Line : Maharashtra co-op market intervention plan — Cotton arrivals slow down as trade fears price erosion

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Maharashtra co-op market intervention plan — Cotton arrivals slow down as trade fears price erosion

G. Gurumurthy

Coimbatore , Nov. 21

THE cotton selling price quote of the Maharashtra State Co-operative Cotton Growers Marketing Federation, which is likely to be announced this week, has raised the anxiety levels of private traders across the country.

The market intervention made by the federation recently to procure the new cotton crop during the current season at Rs 2,500 per quintal has upset the cotton trade which feels the State intervention has disturbed market sentiment leading to slow down in kappa arrivals, and, thereby, affecting the rhythm of the price behaviour.

The State's intervention thereby, preventing the market forces to operate will ultimately harm the cotton growers who are sitting on a bumper crop. They will suffer in the form of further price erosion for their produce later when import of cotton takes place in the coming weeks, said Mr Ashok Daga, President of the Coimbatore Cotton Association (CCA), a cotton broking/selling agents body here.

Talking to presspersons on the sidelines of the 32nd annual general meeting of the CCA here on Sunday, Mr Daga said although the depth of the current domestic cotton market trend would be revealed fully only next month, it was clearly felt that the federation's decision had led to the farmers holding back their kappasinanticipation of a price rise. But it would not be the case, he said, considering that the current crop would be an all-time high of 200 lakh bales plus and that all producing States including Maharashtra, Gujarat, Punjab, Haryana and Rajasthan had reported excellent pest-free crop.

According to the CCA President, the total cotton arrivals estimated so far (till last week) were some 21 lakh bales, whereas last year the arrivals at this point of time remained higher at 24 lakh bales. The slow arrivals had also affected the performance of the ginners in major production centre who are ironically operating at 50 per cent of their capacities or even below than that.

At the other end of the market, namely the cotton consuming mills side, the trade anticipates that the mills would not be in hurry on covering supplies and they may go for only hand-to-mouth buying as the size of the crop would ensure that the quality fibre in the market, said Mr Hiren Desai, the former President of CCA.

Earlier, addressing the CCA meeting, Mr Daga said his association had intended to take a delegation to Pakistan to study the market feasibility to sell fine count yarn from South India. In this regard, he said his association was trying to bring the Pakistani delegation, which is visiting India to participate in the International Cotton Advisory Council meeting to be held this month-end in Mumbai, to Coimbatore.