Manoj Soni, Commodity Online
RAJKOT: How low can cotton prices go and how long can government intervene and give a higher MSP? Ginners in Gujarat are asking this question to themselves as the government is in no mood to answer.

They are meeting tomorrow to see how their business can be revived in the wake of a global slump in demand.

Globally the buyers are expecting the prices to go down further and are awaiting further slump before placing further orders.

Cotton prices have fallen 30 per cent since the beginning of the season in August 2008 and in all probability it will go further 20 per cent.

That makes the prices of cotton half of what the ginners exported last year.

China, US and Europe still remains two of the largest destinations for cotton from India and it was only six months back that Wisdom Cotton, a leading indenter and selector of Indian cotton, projected a high demand scenario for Indian cotton.

But recession changed it all and instead of a high demand, the global demand is expected to decline by three per cent to 25.5 million tonnes in 2008-09.

The Indian cotton farmers, who reportedly earned more income per hectare than their western world counterparts due to BT cotton invasion now finds themselves at the risking their product being unsold.

Though Cotton Corporation of India is procuring the product at the government fixed rate, the ginners are wondering where CCI is going to dump the procured cotton since the demand is already down.

“The government thinks politically and so it can’t find logic behind the higher MSP they are paying,” said Rajesh Patel, a Saurashtra based ginner.

Patel has been running his machines only two days a week since he is not able to procure cotton at higher prices from the producers.

He echoed the feeling of International Cotton Advisory Committee (ICAC) which has forecast the current season average Cotlook 'A' Index to be between 64 and 73 cents per lb.

The ginning mills in Gujarat have already called for a meeting to be attended by the ginners of seven states on 21 November, 2008 to chalk out a strategy.

They have threatened an indefinite strike against what they call as foolish move by the government to fix a price that is not only illogical but unviable too.