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Rahul Wadke

Mumbai , Sept. 20

THE Maharashtra State Co-operative Cotton Growers Marketing Federation, the nodal body for procuring cotton in the State, is in a fix. The agency, saddled with an inventory of 25 lakh bales (of 170 kg), is faced with the prospect of fresh arrivals in the next 45 days.

There is no offtake of cotton as the market has hit a bearish phase in the last month, having managed to sell only 17.5 lakh bales out of the 42 lakh bales procured during the year.

The cotton federation had shelled out Rs 5,600 crore during 2004-05 for acquiring the commodity under the Cotton Monopoly Procurement Scheme.

With the new season set to begin in November and talks of a good crop yet again doing the rounds, questions are being raised in the State Government as to what can be done with the existing inventory of 25 lakh bales. The problem facing the Government is it has no godowns available to store fresh arrivals.

"We would be forced to store the cotton in the open, which would be vulnerable to theft, fire and water. Moreover, the cotton market is bearish and not much activity in the futures market. We are also are anticipating very good crop in the coming season due to adequate rains. All these factors would further compound our problems," State Government sources said.

The last time the carry forward stock exceeded seven lakh bales was in 1999-2000.

The Centre had given the go-ahead to the Government in June to export 10 lakh cotton bales, but it has not happened. The State Government had received a transport subsidy of Rs 500 on every bale towards the exports.

Now the State Government would have to abide by the earlier decision of buying cotton at the minimum support price, as decided by the Centre. In 2004-05, the support price was fixed at Rs 1,960 per quintal. Against this, the State Government had paid the farmers Rs 2,300 per quintal.

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