Researchers in India advise farmers not to stock cotton

30 Nov '11

3 min read

Researchers working on the National Agricultural Innovation Project (NAIP) in India have advised farmers not to stock their production and sell cotton at current prices.

NAIP has eleven partner institutes which work on the project for establishing and networking of agricultural commodity prices with market intelligence in India. The aim of NAIP is to increase the income of the farmers and creating awareness among them regarding the market scenario.

Researchers working on the project advise the farmers when to sow a certain crop and when to preserve or store the crop, keeping in mind the prices of the commodity likely to be available at the time of harvest.

Fibre2fashion spoke to Dr. RL Shiyani, Professor & Head and Prof. MG Dhandhalya, Assistant Research Scientist, at the Department of Agricultural Economics, Junagadh Agricultural University (JAU), which is one of the 11 NAIP partner institutions.

The researchers stated, “Our advice to farmers is to sell their cotton at current prices and not to stock their production, because there is no chance of increase in cotton prices in the next few months.”

Explaining the reasons for their conclusion, they said, “Due to unexpected rise in cotton prices last year, this year the cotton acreages in India have increased to 11.8 million hectares. Major increase was in areas of Gujarat, Maharashtra and Madhya Pradesh. Hence, this year we are expecting the cotton production to be around 36.1 million bales (1 bale = 170 kg) as against 33.4 million bales production last year, as per the fourth advanced estimates of the Government. India's consumption is likely to remain steady at around 27.4 million bales. So compared to last year, this year there will be more year ending stock.”

“Moreover, unlike last year, there is bumper cotton production in China and Pakistan as well. So at world level, according to International Cotton Advisory Committee (ICAC), cotton production will be 8 percent more than last year while consumption will increase by only 2 percent. There will be new stock by year-end, so there is no chance of cotton prices to increase,” they added.

Comparing the last year's price of cotton with expected price this season, the researchers said, “Last year, at the sowing time, the price of cotton was Rs. 700 per 20 kg but, at the time of harvest it went up to Rs. 900 per 20 kg because of shortfall at international level. Then again there was loss of production in Australia in the end of December to 1st week of January. This was followed by saturation at international level and cotton prices increased from Rs. 900 to Rs. 1400 per 20 kg. However, this year we forecast the price to remain in the range of Rs. 700-900 per 20 kg.”

Fibre2fashion News Desk - India

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