The Cotton Corporation of India (CCI) has said it will start purchasing cotton if the crop fits into parameters set by the procurement agency in terms of moisture content.
“CCI will first attempt to sell its stock of 17 lakh bales procured during the previous season and then take a call on buying cotton from farmers subject to market conditions,” said BK Mishra, CMD, CCI.
“Today’s prices of cotton are around R2,500 per quintal, which is above MSP and therefore there is no requirement as yet for cotton procurement. However, as arrivals increase, a possibility could arise for procurement from farmers,” Mishra said.
“CCI is setting up purchase centres across the cotton growing regions of the country. Cotton will be purchased if the crop fits into parameters set by CCI in terms of moisture content,” he said.
At present, the arrivals that have begun in some parts of the country have a high moisture content ranging between 18-20%. CCI will purchase cotton with moisture content below 12% and the current arrivals are not of good quality, he added.
The agency expects to begin procurement from Telangana this season (2015-16) to be followed by Andhra Pradesh and Maharashtra.
In Telangana, CCI has established 84 purchase centres and expects to open around 330 centres across the cotton growing regions of the country. State marketing minister T Harish Rao has directed the officials to ensure that the CCI opens its centres before October 17, as the first batch of cotton would hit the markets at that time.
Mishra said that CCI has been preparing for purchase in Telanagana because there has been a demand from farmers and the state government as well. In the last two to three days, international prices of cotton have gone up and therefore CCI’s purchases will depend on the market conditions, he said. Some farmers from Telangana have demanded an MSP of Rs 5,000 per quintal.
In Maharashtra, the Maharashtra State Cooperative Cotton Growers Federation is learnt to have submitted a proposal to the state government seeking permission to begin cotton purchase from November 15 onwards.
According to Mishra, mills from the country have been purchasing cotton from the corporation and he expected good sale to continue. There is an expected slump in cotton output by 5-10 lakh bales this year because acreage has been affected to the tune of some 20%, he said. In Maharashtra, the cotton output is likely to touch 350-400 lakh quintals.
In the northern region of Punjab, Haryana and Rajasthan, the standing cotton crop has had a whitefly attack problem. Because of this Punjab has allocated a compensation of Rs 10 crore to affected farmers. The price of J-34 roller gin cotton in Punjab is Rs 3,750 spot per maund while in Haryana J-34 r/g was quoted at Rs 3,720 spot per maund.