Cotton procurement by government agencies has begun in Maharashtra. The Maharashtra State Co-Operative Cotton Growers Marketing Federation ( MSCCGMF) has said it has procured around 39641 quintals so far this season. The federation at the start of the season had said that it was ready to procure up to 100 lakh quintals as against the 27 lakh quintals it had purchased last season.
NP Hirani, chairman of the federation, told FE that some 34732 quintals of cotton has been procured from Nagpur and 4929 quintals from Aurangabad. Another 33,000 quintals has been procured by traders, he said.
The agency has opened some 64 purchase centres in the state, which include 25 centres in Nagpur and 29
in Aurangabad. The federation, which operates as a sub-agent of the CCI in Maharashtra, will purchase cotton from farmers at Rs 4,100 per quintal.
The government has fixed the MSP at Rs 4,100 per quintal for long staple cotton and at Rs 3,800 per quintal for medium staple for the 2015-16 marketing year. The amount will be credited directly into the bank accounts of farmers, Hirani said.
He said the pilot intended by the Centre to encourage farmers to directly approach traders for selling their crop below MSP wherein the government will subsequently credit the difference between MSP and market price into their accounts is yet to take off. The pilot is still in the planning stage, he said.
Meanwhile, the Cotton Corporation of India (CCI) has begun its MSP operations across Andhra Pradesh, Telangana and Maharashtra in a small way. The agency has indicated that the government may procure only 20-25 lakh bales of cotton in the current marketing year that began last month as domestic prices are higher than the support price in many parts of the country.
CCI purchased 87 lakh bales (of 170 kg each) in the 2014-15 marketing year, which runs from October to September. The CCI has so far purchased 3,000-4,000 bales in Telangana and Andhra Pradesh. “We will procure in Maharashtra, but in other states, we may buy negligible quantity,” Mishra had said earlier. Cotton procurement will be much lower this season because prices have not fallen below the MSP in most places.
CCI will buy comparatively at higher price,The corporation plans to open over 300 centres across the country and will procure mainly in Telangana, Andhra Pradesh and partially in Maharashtra.
It has opened 84 centres in Telangana and 25 centres in Andhra Pradesh. It targets to set up a total 43 centres in AP and 50 in Maharashtra.
According to industry data, the CCI has been left with an unsold stock of approximately 12 lakh bales for which there is now a good demand because of high moisture content in the new cotton arrivals.
Earlier this week, the Indian Cotton Federation said that the CCI has planned to procure cotton to support the farmers to address the price fall below MSP levels. Textile mills have been demanding the revamp of CCI for a fair cotton trade policy.
The Maharashtra federation chief had earlier said that cotton yield domestically was expected to be good at 370 lakh bales.
In Maharashtra around
375 lakh quintal yield was expected. But the global and domestic scenario was not favourable and prices would remain subdued.
There was huge carry forward stock of unsold cotton from last year and demand was low from textile mills in the country.
The federation intends to set up 64 procurement centres across the state.
This year, too, the government has asked the CCI to buy cotton from farmers as and when price drop below the MSP level.
Last season, the federation purchased only 26 lakh quintals.MSCGCF has received nearly Rs 50 crore from the state as margin money and plans to use this raise Rs 800 crore worth funds from various banks.
A bumper cotton crop is expected in the state this year. Significantly, Vidarbha has the largest area under cotton cultivation in the state.