China 'bales' out cotton farmers from Pak woes

Cotton growers in the country thought they would become collateral damage after India hiked the customs duty on imports to Pakistan to 200 per cent following the Pulwama terror attack. But they are breathing light now that they have found a new buyer in China, an ally of the next-door neighbour.

Earlier in March, Indian traders signed agreements to export 11 lakh bales to China, which has pulled up cotton prices to Rs 6,000 a quintal from Rs 5,300 in the wake of the hostilities with Pakistan.

The price of cotton seeds has also climbed up, ushering in a field day for farmers.

The relief is especially audible in Maharashtra, the country's second largest cotton grower which raises 21 per cent of the national produce.

Kailash Patil, 35, a grower in Jalgaon in the state's north, says: "The season started at Rs 5,800 per quintal last October, which dipped to Rs 5,500 in December. When the conflict started, the prices sank to Rs 5,300. Many panicked and sold off the stock," said Patil. "But now cotton is trading at a record high."

Once the punitive tax on exports to Pakistan kicked in days after the February 14 attack on a CRPF convoy in Kashmir, trade with Pakistan was severely hit, affecting cotton farmers here. "The headlines were leading us to believe there was a possibility of war with Pakista," Patil said.

"Many farmers thought cotton rates would only plunge if a war broke out. So a majority of them sold their produce at lower rates. Now, they have gone up again," said Patil, happy that he didn't fall prey to speculation on the television.

Pradeep Jain, a city-based cotton exporter, cited two reasons behind the cotton price rise, which he says is "artificial". and "will not sustain for long". "China is a major cotton buyer in the world. If they start buying, the global prices automatically go up. They have got 3 lakh bales as a buffer stock," Jain said.

One bale of cotton has 175 kg of seedless cotton.

"Second, the Cotton Association (CAI) of India has predicted a shortage in the country this year. Production will be 3.35 lakh bales against 3.65 lakh bales last year. The current rate of a bale is Rs 46,000 against Rs 43,000 a few days ago," Jain said.

Vijay Jawandia, an agricultural expert from Nagpur in Viodarbha region, said that this year, maize crop has badly failed in the US, resulting in a rise of cotton prices, since cotton seeds are used as a substitute for animal feed.

"The government should impose an import duty on cotton. As per my information, Indian traders had also decided to import 29 lakh bales of cotton from African countries. If an import duty is not imposed, cotton prices will come down again. The government should not work under pressure from the textile lobby. They should work for farmers and their interests," said Jawandia.