But this year, most of the mills, including the smaller ones, are running at half their capacity, despite the fact that the 2007-2008 season (October to April) saw an increase in Bt cotton cultivation area by 30 per cent.

This year, Bt cotton production is expected to cross the one crore mark, but not everyone associated with the industry is happy. The number of ginning mills in the state has nearly doubled in the last two years. A phenomenal 110 units have sprung up to cash in on the boom, but with production levels not very high, it has become a case of survival struggle for them.

Since 2002, cotton production has registered a remarkable growth every season- from 30 lakhs bales in 2002 to 1 crore in 2007. Increase in cotton cultivation area and production, coupled with improving export scenario, inspired many to invest in the ginning industry. But this season, it has literally outgrown the supply of its main raw material – cotton bales.

In the first three months of the current season – October to January – Bt cotton production touched 70 lakh bales in Gujarat. In the coming two months, it is likely to cross the 1 crore mark. But the disparity between an ever-increasing ginning industry and the supply of raw cotton is likely to remain, and even an increased production won't meet the requirements, according to industry experts.

“There are over 850 ginning mills in Gujarat. More than half are located in Saurashtra and Kutch. These mills, half of them which have come up in the last two years- over 110 only last year-, are running at half to their capacity,” said secretary of Saurashtra-Kutch Ginners Association Anand Popat.

According to Popat, against the current requirement of two lakh bales per day in Gujarat, the supply is stagnated at 1 to 1.3 lakh bales. “The profit margins have reduced drastically. For the smaller units its become a kind of survival struggle,” he said.

“We have been running half of our capacity. Given the fact that mills are coming up at a faster rate than the production of raw cotton, the situation is likely to get worse,” said Raju Doshi, a ginner and an industrialist from Rajkot.

Ginners in Gujarat are now relying on neighbouring states like Maharashtra and Madhya Pradesh to maintain the supply of raw cotton. But the situation in Saurashtra-Kutch, which saw a major development in ginning industry last year, is worse compared to the rest of Gujarat.

“Mills in Kadi and other parts of Gujarat are getting most of the deals from other states. Saursahtra, where 90 mills have come up last year, are largely running on the local crop,” said Y B Rana, president of Surendranagar District Ginners Association, which has 41 members and a turn-over of Rs 300 crore.

Report By : Hiral Dave
Courtesy By : Express India