As cotton prices have crashed by around a quarter in the last one year, the government has asked the state-run Cotton Corporation of India (CCI) to step up cotton purchases from farmers at the benchmark prices.
“CCI has been asked to raise its procurement operation by opening more centres wherever necessary,” textile minister Santosh Kumar Gangwar said on Wednesday. The move is usually aimed at preventing distress sales by
The CCI has so far procured 250,000 bales, of 170 kg each, in the current marketing year that started on October 1. Most of the purchases were from the southern state of Andhra Pradesh.
The expectations of a bumper cotton harvest in 2014-15, coupled with subdued prices globally, have weighed on domestic rates. The Cotton Association Of India has forecast that India will pip China as the world’s largest cotton producer in 2014-15, with output expected to hit 40.55 million bales, slightly lower than the record harvest of 40.72 million bales last year.
CAI president Dhiren Sheth said the country is heading for a big procurement operation at minimum support prices this season due to plentiful
Cotton prices in Gujarat (ICS-105 fine, 29 mm variety) were ruling at R39,900 per candy of 356 kg as of November 11, down from R42,000 and R42,600 in the beginning of April and May, respectively.
Worsening the problem, demand from China has slowed considerably in 2014-15, as the world’s top consumer has aleady piled up huge stocks and is reported to be considering trimming inventory.