Cotton and soyabean rates crash, market players call it Indo-US trade deal impact

Nagpur: Rates of cotton and soyabean, the two major crops of the region, crashed with market players calling it the impact of the Indo-US trade deal. The development comes even though the deal is yet to be implemented.The trade pact draft calls for duty-free import of extra-long staple cotton, as well as limited duty-free purchase of Distillers Dried Grains With Solubles (DDGS) from the US. DDGS, used as animal feed, is linked with soyabean prices in India.
Cotton rates touched Rs7,200 to Rs6,700 in the open markets, as against the minimum support price (MSP) of Rs 8,110. Even soyabean rates slipped below Rs5,000 a quintal, even reaching Rs4,200 a quintal in some markets. Soyabean has an MSP of Rs5,300 per quintal.Shetkari Sangathana has raised concern over the trade deal. The farmers' outfit in the state had in the past supported govt over the three controversial Farm Laws which were later withdrawn. A press note issued by the Shetkari Sanghatana president Anil Ghanwat said DDGS made from rice and maize is already affecting domestic soyabean prices. DDGS made from paddy and maize have emerged as competition to soyabean. Both are used as animal feeds. Lately, DDGS has emerged as an option for the feed derived from soyabean de-oiled cake (DOC). If DDGS is imported without duty from the US, it would heavily impact domestic prices of not only soyabean but also of maize.Farm activist Vijay Jawandhia said the trade deal has already started affecting domestic markets. Rates of both soyabean and cotton have slipped below the minimum support price (MSP), he said."Traders who buy cotton and sell it to the ginning mills have already lowered the prices while pointing at the US trade deal. As a result, some farmers are directly selling cotton to ginners to get slightly better prices. However, with prices crashing fast, even ginners may not be able to pay a better rate to the cotton growers," said a ginning mill owner in Yavatmal. The MSP procurement by Cotton Corporation of India (CCI) continues.Manish Jadhav, a farmer in Yavatmal's Mahalgaon Taluka, said most farmers have sold their soyabean produce and only a limited quantity of cotton is left. However, the growers are worried about the long-term impact of the price crash. The farmers who had held on to their produce would be at a loss now, a source said.