Cotton Corporation of India procures nearly 1 lakh bales of cotton so far

The Cotton Corporation of India (CCI) has so far procured 98,900 bales (of 170 kg) of cotton in the current season till December 10 as compared to 3.09 lakh bales purchased in the previous season, according to the government data. This could be possibly be one of the biggest cotton procurement exercises by CCI in recent years. Maximum cotton procurement had last occurred in 2008-09 when about 96 lakh bales were procured, top officials of CCI said.

Much of this procurement made at minimum support price — 86,000 bales – happened in Telangana, Agriculture ministry said. In the last cotton season too, Telangana accounted for 68 per cent of the cotton procured by the public sector firm.

As per the estimates made by the Cotton Advisory Board, cotton production this year is projected at 361 lakh bales, nearly 20 lakh bales more than that estimated by the Cotton Association of India (CAI). CAI revised its yield projections downwards last week as it feared that crop losses in major cotton production States such as Gujarat, Maharashtra, Telangana and Karnataka.

Both Gujarat and Maharashtra contribute 55 % of the country’s cotton production. The Centre has estimated cotton production could be 7 % lower than last year.

CCI has promised to establish 348 purchase centres across major cotton growing regions of the country. The corporation is also ready to establish another 30 centres in case of more requirement from the market. With a higher MSP declared by the government, farmers will prefer to sell to CCI than approach traders because of assured returns.

The Centre has announced minimum support price of long staple cotton at Rs 5,450 per quintal from Rs 4,320 per quintal, a raise of 26 % from last year. MSP of medium staple cotton has been fixed at Rs 5,150 per quintal from Rs 4,020 per quintal last year, a hike of 28% to last year.

CCI will use Rs 250 crore for cotton procurement this year. This fund will be set up through the consortium of banks.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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