Gujarat is facing a shortfall in cotton supply due to the currency monetisation. From 35,000 bales of cotton, arrivals have dropped to 15,000 bales. Gujarat is a major cotton-producing state.

There are some transaction issues. Ginners can only pay in cheques, but farmers are not interested in payment through cheques. So farmers return home with the cotton. Just about 20 per cent of farmers are open to payment through cheques. Even otherwise, the cotton trade is mainly carried out through cash.

For ginners, procurement of cotton can cost up to at least Rs 3 crores a day. There is a fear farmers may hike prices of the crop if the markets remain shut due to a lack of funds. Business transactions will be low until the situation stabilizes. This is the peak arrival season for the cotton crop.

Till the day before the decision to scrap the currency was taken, markets were operating at peak activity. Arrival of all crops were recorded in normal quantities. But since then market activity has dropped. Cotton seed and cotton oil prices have also risen. Where usually there is movement of Rs 2 or Rs 3 per 20 kg in their prices each day, there has been a movement by nearly Rs 10 per 20 kg since then.