Cotton Corporation of India buffer stocks drop down from 115 lakh bales to 9 lakh bales

India’s textile industry has been purchasing cotton vigorously in the last few weeks. The Cotton Corporation of India (CCI) has almost exhausted all its existing stocks and is now left with only 9 lakh bales before the start of the next season in October, due to the strong demand for cotton in the market. This is a clear indication that the textile industry is expecting an upsurge in its prospects during the ensuing months.

Pradeep Kumar Agarwal, chairman and managing director of CCI, said the corporation had an opening stock of 115 lakh bales of cotton at the start of the season in October 2020 and had procured 92 lakh bales since then. In the last one month, 40 per cent of the cotton sold by CCI has been purchased by textile mills directly.

“International cotton prices and MCX prices have risen by Rs 7,500 and  Rs 6,000 a candy, respectively, in the last one-and-a-half months. But CCI has been conservative in increasing prices and has raised prices by Rs 2,200 to  Rs 2,500 a candy for the same period, except for one to two varieties, where it is higher,” he said.

With cotton prices rising, the textile industry has sought removal of 10% import duty on the produce. Southern India Mills’ Association (SIMA) said in a press release that the increase of Rs 3,800 a candy of cotton last month by CCI and the 10% import duty on cotton were affecting the entire textile value chain. It had made textile exports ‘expensive’ in the global market, it said.

CCI sold around 1.28 crore bales (170 kg each) to millers and traders in the 2020-21 season. In addition to domestic sales, the CCI also sold 30,000 bales to Bangladesh in February this year.  CCI sold almost all stocks of the previous season of around 108 lakh bales and some 20 lakh bales from the current season, which means a total of 128 lakh bales or 1.28 crore bales.

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