The procurement of cotton by the state run Cotton Corporation of India (CCI) has neared 5 billion bales of 170 kg each, during the ongoing season October 2014-September 2015, according to media reports.
The CCI is actively purchasing cotton in states where the market price has fallen below the minimum support price announced by the government.
While there is steady arrival of about 250,000 to 300,000 bales of cotton on a daily basis, spinners are not actively buying cotton as yarn exports have declined considerably.
India’s cotton production this season is estimated at 40 million bales and the CCI has facility to comfortably store about 10 million bales. However, if the CCI buys that much quantity it would be the highest quantity of procurement ever.
So far, CCI’s record procurement was in 2008-09 at 8.9 million bales.
During the ongoing season, CCI has spent more than Rs 9,600 crore on purchase of cotton at an average price of Rs 1,060 a quintal. However, a decision on off-loading the cotton stock is yet to be taken.
Meanwhile, the South Indian Mills Association (SIMA) has urged the CCI to begin procurement of cotton at MSP in Tamil Nadu.
SIMA chairman T Rajkumar said international cotton prices were serious affected due to China announcing its policy of restricting cotton imports to 25 per cent of its consumption in February 2014. He added that New York Futures for cotton had remained below 70 cents, as against the normal rate of 90 cents, since August 2014.
He said the CCI had so far mostly procured cotton from Telangana, and had not undertaken any procurement under MSP in the last 20 years in Tamil Nadu, as it is amongst the lowest cotton producing states. (RKS)
