A firm trend in cottonseed prices is holding up the natural fibre prices even as sowing for the kharif 2024 season has begun in the southern States of Karnataka, Telangana and Andhra Pradesh as they have started receiving monsoon rains. The trade expects cotton acreage to rise in Telangana, where a section of chilli farmers are likely to shift to the fibre crop as prices of the spices crop have been ruling weak.
“The cotton growing areas in Karnataka and Telangana have received a couple of spells of rains, which is a positive sign for the crop,” said Ramanuj Das Boob, a sourcing agent for multinationals and domestic buyers in Raichur. The expectation is that there will be an increase in area in Telangana as cotton prices are ruling firm ahead of the planting season, while chilli prices are not that great and may prompt farmers to go for cotton, Boob said.
Monsoon, which made an onset in the last week of May has advanced covering most Kerala, Tamil Nadu, Andhra, Karnataka, most part of Telangana and parts of Maharashtra.
Inhibiting factors
“All the major cotton-producing States such as Telangana, AP and Karnataka have received good rainfall and seed purchases have picked up in the past couple of days,” said Baya Reddy, agri-inputs sales leader at BigHaat, an online marketplace for agri-inputs. The purchase progress of cottonseeds ranges between 35 and 50 per cent in these States and planting may have taken place in about a tenth of the targetted areas. Reddy said cotton acreages are likely to decrease in a few areas such as Kurnool and parts of Telangana, due to the crop shifts that varies from markets to markets.
In North India, where cotton plantings begin early from mid-April, the acreages are likely to drop by about a fourth due to factors such as increase in pest infestation in recent years and rising labour costs.
Kapas rule firm
Boob said the raw cotton or kapas prices are ruling firm and ranging around ₹7,500-7,600 per quintal, above the minimum support price (MSP) levels in parts of Karnataka and Telangana. An increase in demand for cottonseeds for crushing is keeping the prices firm, even as the market arrivals of raw cotton has dwindled. In Karnataka the daily market arrivals of cotton is around 2,000 bales, while in Maharashtra it is around 15,000-20,000 bales. Boob said the cottonseed prices are ruling between ₹3,300 and ₹3,500 per quintal, up from around ₹2,800-3000 about a month ago.
