All India Cotton FPO Association president Manish Daga echoed the sentiment, terming the minimum support price (MSP) as the only attraction in the market, adding that lack of access to MSP for farmers may lead to a reduction in cotton sown areas from next year.
Stating that more exports would mean the industry would be able to source from cotton farmers, the CMD of the Cotton Corporation said further decisions on extending import duty exemption on cotton would be based on a “holistic approach”.
India has waived import duties on cotton until the end of the current calendar year. Considering global uncertainties, wars and tariffs affecting textile exports, he said the government was taking all necessary measures to protect the interests of all stakeholders.
While Gupta highlighted an 8% increase in MSP for the current cotton season, he pointed out that cotton prices in the domestic and global markets are at their lowest level in 4 years. He told CNBC-TV18 that the government has opened 550 procurement centers in 11 cotton-producing regions and improved farmers’ access to markets in hopes of surpassing last year’s cotton purchases, which we described as the second highest MSP operation.
To align procurement with regional harvest readiness, procurement operations have started in the northern zone (Punjab, Haryana, Rajasthan) from October 1 and are expected to start in the central zone (Gujarat, Maharashtra, Madhya Pradesh, Odisha) from October 15 and in the southern zone (Telangana, Andhra Pradesh, Karnataka, Tamil Nadu) from October 21.
Highlighting climate change, crop yields and waterlogging as challenges for farmers as they can delay cotton flowering and compromise quality, Daga does not expect prices to rise above MSP in the current calendar year as textile purchases are down. He said farmers would benefit if the Cotton Corporation of India purchases more than 1.5 crore bales, as it did in previous years.
However, he stressed that procurement will be easier said than done and will depend on when it starts and the availability of quality cotton. Stating that India has 70-75 per cent of cotton farmers with small farms, he added that they will not be able to keep cotton until the new calendar year if it is not purchased.
