According to Dabhoi Police, the fire occured around 10.45 am in Dabhoi Ginning and Pressing Factory run by the Cotton Corporation of India in Vega village.

Police said the unit lost around Rs 9.1 lakh cotton bales piled up in the unit.

The officers added that around four similar mishaps have taken place in the past, but there is no fire protection equipment present in the factory.

Honorary advisor to the Central Gujarat Cotton Producers' Committee Kishore Shah said a very few cotton ginning units in the state have requisite facilities for fire protection.

"Although CCI purchases around 70 per cent cotton from the farmers, the facilities and infrastructure are not adequate enough to store the bales, which could have been the cause of the accident," said Shah.

He, however, added that the presence of pebble, which ignites fire due to friction while ginning can also be the reason beehind the fire.

On the other hand, Deputy Manager of Cotton Corporation of India S R Mittal said the loss was negligible.

"However, being the sole buyer of cotton in central Gujarat, sometime these mishaps occur. We lost around 15 per cent of 12,000 quintals of cotton stored in the factory on Wednesday's fire," said Mittal.

He further added that maximum sale prices – the rate at which CCI buys from the cotton farmers —have gone up from Rs 2,200 to Rs 2,800.

Central Gujarat, which is considered as an important region for cotton production in the country, the loss can be major one as an untimely monsoon, a late arrival of winter has adversely affected the crop.

Moreover, the total area to be used for the cotton production has reduced from 95 lakh hectares to 92 lakh hectares for 2008-09 as per the estimates of CCI. Moreover, cotton production is expected to dip to 28.5-29.5 million bales in 2008-09 as against the target of 32.3 million.