1. Cotton body to intervene in Punjab market if prices fall below MSP

Cotton body to intervene in Punjab market if prices fall below MSP

Even as the government of Punjab has sought intervention by Cotton Corporation of India (CII) after the reported cotton crop loss caused by whitefly attack in the state...

By: | Pune | Published: October 15, 2015 12:07 AM

Even as the government of Punjab has sought intervention by Cotton Corporation of India (CII) after the reported cotton crop loss caused by whitefly attack in the state, CCI says market intervention at this stage may not be necessary since good quality crop has been selling above minimum support price (MSP). Meanwhile, the Corporation is readying its 330 purchase centres across the country for procurement whenever required.

Top officials of CCI said although the whitefly attack on the crop has caused substantial damage, the cotton has been selling at market prices. Punjab chief minister Parkash Singh Badal met Union textile minister Santosh Gangwar in this regard recently  and requested to begin support operations. BK Mishra, CMD of CCI said the agency is gearing up for operations and has directed the local office to begin 20 centres in Punjab.

“We did not get any report of distress selling in Punjab but are prepared to buy if need be. CCI can intervene only if the price falls below the benchmark MSP. We are looking at the price movement closely. CCI can intervene only when the price was near or below the MSP,” he said.

CCI had procured 120,000 bales (each 170 kg) in the 2014-15 season from Punjab at the MSP and 70,000 bales in 2013-14 at the market price. Punjab normally produces 12 lakh bales of cotton and contributes 12% of the country’s total cotton production. Around 8 lakh hectares in Punjab has been affected by the whitefly attack.

According to reports, extensive damage has been caused to the cotton crop in both Punjab and Haryana by the whitefly pest, with textile industry executives anticipating a 30-40% drop in harvest in the current marketing year that started on October 1 from a year earlier.

CCI has a buffer of 17 lakh bales bales from the earlier season and is liquidating 25,000 to 30,000 quintals a day, he said. Arrivals are also moderate at around 50,000 bales a day across the country and are expected to pick up in the middle of October.

CCI expects to begin procurement of cotton from Telangana this year to be followed by Andhra Pradesh and Maharashtra at a later stage.

“CCI will first attempt to sell its stock of 17 lakh bales from the procurement of the previous season and then look at cotton purchase from farmers subject to market conditions,” Mishra had earlier said.

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.

CCI has said it will start purchasing cotton if the crop fits into parameters set by the procurement agency in terms of moisture content. 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%.

Mishra said  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.

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