Cotton ginning units worried over Mandi tax imposed in Madhya Pradesh

05-Aug-2024 01:38 PM

Indore. Cotton ginning units in Madhya Pradesh and especially in Indore division have started their preparations for the upcoming marketing season.

This season is going to start from the last week of September. However, the demand for cotton is likely to remain uncertain because its price is non-competitive and the sentiment in this sector remains soft.

There are about 200 cotton ginning units in Madhya Pradesh, out of which about 100 units are operational in Nimar division alone.

A ginner from Khargone says that the mills have started preparations for ginning (processing) of cotton in the new season,

but the utilization of the capacity of the units is likely to be affected to some extent this time because the local mills will have to struggle hard to remain competitive due to high prices.

In Madhya Pradesh, the price of cotton remains a bit higher due to Mandi tax as compared to other states, due to which the pace of its business remains slow. Mandi tax is levied on both cotton and cotton in the state.

It is noteworthy that the cotton (processed cotton without cottonseed) of Madhya Pradesh is consumed in the provincial markets and the surplus stock is also sent to states like Maharashtra, Andhra Pradesh and Tamil Nadu.

Ginners say that Mandi Tax should not be higher than 0.50 percent under any circumstances whereas in Madhya Pradesh it is 1.20 percent. It is becoming increasingly difficult to sell cotton to other states because its price in Madhya Pradesh remains relatively high.

As a result, the processing and ginning industry is forced to reduce its processing capacity.

The arrival of new cotton is expected to start in the mandis of Madhya Pradesh from the end of September or beginning of October. This time the sowing area is normal and the condition of the crop is said to be satisfactory.