“Of the 12.5 million ha of overall acreage under cotton, 93.6 per cent or 11.7 million ha has come under Bt this year,” said Ravindra Rao, Head of Research, Kotak Securities in a report titled Commodity Insight.
With this, the insect resistant transgenic crop has regained farmers’ confidence which had been shaken three years ago due to a stagnation in cotton yield after significant a pick up in the initial years of its launch.
Cotton prices remained highly volatile last year. After trading below the minimum support prices (MSP) for a long period, cotton prices recovered to surpass this benchmark level. The government raised the cotton MSP by Rs 100 to Rs 5,550 a quintal this year again from Rs 5,450 a quintal last year.
“The government must allow farmers to sow the latest high yielding seeds available in Bt series with more traits that global farmers have already been sowing. Indian farmers are using Bollgard I and II varieties of Bt transgenic seeds which have reported stagnation in yield. In the absence of any option, farmers are continuing with the seeds available,” said Arun Sakseria, a city-based cotton trader and exporter.
The uneven distribution of the monsoon rainfall caused severe damage to the cotton crop
in its major growing states like Maharashtra, Gujarat, Andhra Pradesh and Telangana.
By the end of August, cotton acreage in Maharashtra had crossed 4.37 million ha against 4.1 million ha sown during last year. A minor decline was seen in Gujarat cotton sowing this year which reached at 2.65 million ha as compared to 2.69 million ha last year.
Meanwhile, cotton supply across the country in the first four days of September reached 3,370 tonnes, nearly double the supply seen in same period last month. Positive cues from international market and reports of some crop losses in Madhya Pradesh are likely to support the cotton prices to some extent for the next couple of sessions.
“However, bearish broader fundamentals like slack demand from the textile industry, limited yarn export demand and upcoming new crop arrival season will keep cotton prices under check for near future,” said Rao.
Cotton prices are currently quoting at Rs 9,100 a quintal in the benchmark Rajkot mandi.