43 percent drop in cotton supply in the markets of northern states
13-Dec-2024 07:52 PM
The cotton supply in the northern states of India—Punjab, Haryana, and Rajasthan—has seen a significant decline during the current marketing season. As of November 30, 2024, cotton arrivals were down by 43% compared to the same period last year. This sharp drop in supply has created concerns throughout the cotton supply chain, from producers to ginning and processing units.
Several factors are contributing to this reduction in cotton availability:
Lower Sowing Area: There has been a substantial decrease in the area dedicated to cotton cultivation in these regions. This is partly due to changing agricultural patterns and possibly less favorable conditions for cotton farming.
Weak Productivity: The productivity of cotton in these states has also suffered, leading to a lower yield per hectare.
Stockholding by Farmers: Many farmers are holding on to their cotton stock, expecting prices to rise in the coming months. This further delays the arrival of cotton in the markets, adding to the existing shortage.
Impact on Ginning-Processing Units: The ginning and processing units, especially in Punjab, are facing an acute shortage of raw cotton, which is essential for producing cotton yarn and other products. This puts pressure on the entire textile industry in the region.
As of now, the price of cotton is fluctuating between Rs 6250 and Rs 8340 per quintal, with most transactions occurring close to the minimum support price (MSP). The cotton season generally runs from October to September, with peak arrivals happening between October and December. However, the early sowing of cotton in April-May leads to the arrival of the new crop as early as September in these states.
The arrival figures highlight the extent of the shortage: up until November 30, only about 54 lakh quintals (or 9.75 lakh bales) of cotton had reached the markets in these three states, compared to 86.15 lakh quintals (17.23 lakh bales) in the same period last year. This substantial drop is contributing to the growing concerns over cotton supply and pricing in the northern Indian markets.