Ludhiana, December 17
The cotton growers of Punjab circle comprising Punjab, Haryana and Rajasthan are being forced to make distress sale of cotton due to low-demand of the same by the textile industry. The prices of cotton are low-demand of the same by the textile industry. The prices of cotton are low compared with the prices of the last year despite the fact that there is fall in the cotton production in this region.

Enquiries reveal that cotton prices of American cotton in the mandis of Punjab range from Rs 1800 to 1860 per quintal this year against Rs 2100 per quintal of the last year. The cotton production in the Punjab circle comprising the three states is likely to the around 20 lakh bales this year against 27 lakhs bales of the last year. The cotton crop was severely hit by American Bollworm (American Sundi) in these states and Haryana and Rajasthan suffered the maximum loss. There was increase in the area under cotton this year and it was expected that there would be bumper crop. But the severe attack of American bollworm has caused big financial loss to the cotton growers. The farmers of Haryana even ploughed their fields when they failed to check the attack of the American Bollworm by pesticides. The Punjab farmers were able to save the crop to some extent because of huge investment in pesticides.

According to the Vice-Chancellor of the Punjab Agricultural University, Dr K.S. Aulakh, the Punjab farmers are estimated to have spent Rs 750 crore on the use of pesticides to check the attack of bollworm this year. The farmers made from 20 to 25 sprays to save their crop. But he felt that the return was not according to the money spent by the farmers on the crop. Punjab alone may have cotton production to the order of 10 lakh bales this year against the production of eight lakh bales of last year. Even traders say that on average the Punjab farmers spent Rs 5000 per acre on spray of cotton crop.

The daily arrivals of cotton in the mandis of Punjab circle are to the tune of 15000 bales including 10000 bales in Punjab alone.

In Punjab Abohar mandi is receiving the maximum cotton of 1200 to 1500 bales followed by 80 to 1000 bales in the mandis of Mansa and Malout. Muktsar is receiving about 400 bales daily.

Surprisingly desi cotton is fetching better price this year and is being quoted at Rs 1850 to 1950 per quintal. Desi cotton is available in the mandis of Haryana and Rajasthan.

Enquiries reveal that the textile industry is facing severe recession as a result of which, there is less buying by the same in the mandis of the state and the country.

According to Dr D.L. Sharma, Executive President, Mahavir Spinning Mills, the spinning mill industry is passing though a severe financial crises. The industry has no buying capacity and there is the biggest problem of cash crunch with the industry.

Mr Sharma explains that last year the industry made purchase of cotton at higher prices but there was sudden fall in the international prices of cotton in January 2001.

The New York future which was quoted at 65 to 70 cents per pound in the month of January fell to 44 to 47 cents per pound and in October this further came down to 30 cents per pound.

This was the lowest ever witnessed in the cotton prices in the international market during the past thirty years. At present the New York future is quoted at 35 to 40 cents per pound which is lower than the cotton prices prevailing within the country.

Moreover, the textile industry has huge accumulated stocks of cotton yarn, fabrics and garments because of fall in the exports of the same. There is 17 to 18 per cent fall in cotton yarn export, 15 to 16 per cent fall in the garments export.

The overall cotton production in the country is expected to be between 145 lakh bales to 150 lakh bales this year plus vary over of 29 lakh bales of last year on October 1.

There was import of cotton to the tune of 22 lakh bales last year and this year again the import is permitted up to 16 lakh bales. The cotton is imported primarily from USA, Australia, West Africa, CIS countries and Greece. There was no import of cotton from Pakistan after the Kargil war.

Mr S.P. Oswal, Chairman, National Textile Committee of CII told today that the Union Government had set up a steering committee under the chairmanship of Mr N.K. Singh, Member Planning Commission to study the crises in the textile industry and suggest ways and means to meet the same. This committee is likely to submit its report within a month.

Meanwhile the textile industry has represented to the Central Government that there should be restricting of the fiscal policies with regard to the textile industry.... and all exemptions should be withdrawn to various industries engaged in this industry.

According to Mr Oswal, the industry has further suggested that there should be single rate of duty on all stages in value chain like spinning, weaving, processing and garments.