The cotton growing farmers and ginners in the African continent are in serious trouble. Most of the domestic and worldwide companies who had signed contracts to purchase cotton are reneging on the same.
The new cotton season began in the midst of the economic meltdown and the resultant slowdown in the textile and apparel manufacturing sector. This lead to a crash in prices of cotton in the months of October and November.
New York cotton futures were ruling at three year lows in the same period. All these factors combined to put pressure on the poor cotton farmers who saw their harvested cotton crops lying idle in their godowns.
The buyers of the African cotton were also unable to purchase the same due to a liquidity crisis, despite the attempts of farmers to sell off the white gold at whatever prices they could get from the cotton buyers.
Subsidies given to US farmers by their government are also a matter of concern for the local agriculturists. Since they can avail of fat subsidies, the US farmers can afford to sell their crops at lower prices, which puts at a disadvantage, the poor farmers worldwide.
In light of the above, the cotton farmers are expected to switch over to other cash crops, which might pressure on cotton arrivals in the next cotton season of 2009-10, if the slowdown was to cease by that time.
The new cotton season began in the midst of the economic meltdown and the resultant slowdown in the textile and apparel manufacturing sector. This lead to a crash in prices of cotton in the months of October and November.
New York cotton futures were ruling at three year lows in the same period. All these factors combined to put pressure on the poor cotton farmers who saw their harvested cotton crops lying idle in their godowns.
The buyers of the African cotton were also unable to purchase the same due to a liquidity crisis, despite the attempts of farmers to sell off the white gold at whatever prices they could get from the cotton buyers.
Subsidies given to US farmers by their government are also a matter of concern for the local agriculturists. Since they can avail of fat subsidies, the US farmers can afford to sell their crops at lower prices, which puts at a disadvantage, the poor farmers worldwide.
In light of the above, the cotton farmers are expected to switch over to other cash crops, which might pressure on cotton arrivals in the next cotton season of 2009-10, if the slowdown was to cease by that time.
