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Posted at: Aug 29, 2019, 6:53 AM; last updated: Aug 29, 2019, 10:17 AM (IST)

Slowdown in textile sector likely to hit cotton growers

Industry experts apprehend distress sale due to lack of buyers
Slowdown in textile sector likely to hit cotton growers
A farmer sprays fertilisers on his cotton crop in Bathinda. Tribune photo

Perneet Singh

Tribune News Service

Bathinda, August 28

Cotton farmers might find themselves in a spot in the coming procurement season, as the textile industry is reeling under economic slowdown, which may well take a toll on private purchase in the market.

At the same time, the farmers are not keen to sell their produce to Cotton Corporation of India (CCI), as the latter is bound by the government order of making a direct purchase. The farmers had last year opposed direct purchase by the CCI, contending that they had an age-old bond with the arhtiyas (commission agents).

Talking to The Tribune, Bhagwan Bansal, former president of Punjab Cotton Factories and Ginners Association, said, “The textile industry is bearing the brunt of US-China trade war. The spinning mills in Malwa region are having a tough time as they are not finding any takers for yarn, primarily because countries like Bangladesh are offering yarn at a lower price. Almost all the spinning mills in the region have curtailed functioning to five days a week.”

He apprehended that some of these mills might even opt for closure, if the scenario remained bleak. He admitted that the private buyers might not be able to offer good price to the farmers for their cotton produce and the latter might have to resort to distress sale.

The association’s incumbent president, Suresh Bansal, said the Union Government must step in to address the crisis being faced by the textile industry. “In the prevailing scenario, I don’t see any possibility of the farmers getting anything beyond Rs 5,000 per quintal, although the MSP is Rs 5,450. The government agencies like the CCI won’t purchase through ‘arhtiyas’, leaving the farmers in the lurch,” he added.

Indian Cotton Association Limited president Mahesh Sharda said, “The situation may be grim, but I can assure you that the farmers will find buyers for their cotton produce. This gloomy scenario won’t last long.”

He felt that a sudden increase of 28 per cent in cotton MSP had also contributed to the problem, as it was difficult for the industry to absorb such a massive hike. He hoped that the government would pitch in to announce some short-term relief measures.

Former North India Cotton Association president Ashok Kapur said, “Usually the cash rich mills store cotton for their operations that run throughout the year. However, if the current situation persists, they may be compelled to run on hand-to-mouth basis without building the inventory.” He, however, was optimistic that the scenario might change before the cotton starts arriving in the region’s markets in October and the government might give a booster dose to the textile industry.

He said they were expecting an estimated cotton production of 45 to 50 lakh bales in Punjab, Haryana and Rajasthan, of which Punjab was likely to contribute around 15 lakh bales.

On the other hand, BKU Ugraha general secretary Sukhdev Singh Kokri Kalan said there was a dire need to bring out small farmers from the clutches of the arhtiyas and the government should give the farmers the only option of direct cash transfer for the sale of their produce to agencies like the CCI.


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