Prices have fallen below minimum support price in most cotton growing States
MUMBAI, NOVEMBER 25
The Cotton Corporation of India is gearing up to procure cotton worth ₹12,000 crore this season as prices in most cotton growing States have fallen below the minimum support price announced by the government.
CCI is expected to buy 60 lakh bales (of 170 kg each) of cotton across Telangana, Andhra Pradesh, Madhya Pradesh and Maharashtra. Currently, it has an inventory of eight lakh bales.
The Government has fixed an MSP of ₹3,750 a quintal for medium staple cotton and ₹4,050 for long staple cotton for the 2014-15 season.
Speaking on the sidelines of ‘Cotton India 2014’, a trade event, BK Mishra, Chairman and Managing Director, CCI, said that funds for procurement would be sourced from a consortium of 14 banks led by Bank of Baroda. “Till date we have bought eight lakh bales in Telangana, Andhra Pradesh and a small quantity in Madhya Pradesh,” he said.
The Corporation plans to offload its inventory over 15 months depending on market conditions. On the possibility of exports, Mishra said going by the current price trend and future forecasts it is unlikely that the Corporation would look at overseas market this cotton season.
India’s cotton output is estimated to touch 40 million bales against 37 million bales recorded last year. The yield per hectare in India is among the lowest at 550 kg while globally it averages about 900 kg.
Cotton exports from India have almost come to a standstill with the domestic prices ruling five cents above the global market. China, which imported 50 per cent of the 12 million bales shipped by India last year, is cutting down on shipments.
Dhiren N Sheth, President, Cotton Association of India, said cotton produced in India is valued at $16.50 billion in seed form and exports account for $3.30 billion an annum.
With the cotton industry economy growing by leaps and bounds, there is an urgent need to review the Technology Mission on Cotton and assess the improvement in infrastructure to process the crop, industry sources say. (Source: The Hindu Businessline)