The demand for cottonseed is likely to come down by five per cent this year due to not-so-attractive market conditions. Last year, the industry sold 3.80 crore packets (450 gm each) of seeds.
“We are expecting either stagnation or a slight decrease of five per cent this year over the last year's figure. Cotton still remains a safe bet despite fluctuations in market prices for this commodity because of lack of alternatives,” Mr P. Satish Kumar, Secretary of Andhra Pradesh Seedsmen Association, told Business Line .
Central Zone continued to dominate the scene in 2011-12 by consuming 2.08 crore packets, followed by South with 1.04 crore packets and the North Zone with 67.90 lakh packets.
production
On the production side, Gujarat might see marginal dip this year.
It produced 60 per cent of all cottonseed last year, followed by Andhra Pradesh with 25 per cent.
Nuziveedu Seeds Limited sold 1.01 crore packets or 27 per cent of the total market.
Cost of production
The industry expects a further decrease in production next year.
“Cost of production has gone up significantly. But the Governments are not factoring the rising input costs to produce seed. If we do not address this appropriately, it might impact seed production next year,” Mr Satish Kumar said.
Supply front issues
Farmers associations, however, are worried about supply side problems.
Significant variation in prices in different zones could lead to flight of seed to lucrative areas, they argue.
Last year, the seed was sold at Rs 825 a packet (BG-I) and Rs 1,000 (BG-II) in the North Zone.
In the Central and South Zone, it was sold at Rs 830 (BG-I) and Rs 930 (BG-II).
The price would come down by Rs 68 a packet, if companies sold seed with redgram seed as refugia.
Prices remained the same for the current year.
“No one buys BG-I. Price of BG-II is Rs 70 more in the North. Farmers in the North sow early and companies would like to sell maximum quantity there, creating supply gaps in the Central and Southern Zones,” a farmers' leader said.