Cotton Corporation of India (CCI) has so far offloaded about 55 lakh bales (each of 170 kg) thanks to bulk discount offer scheme with advantage of longer delivery period and supported by good buying from mills and ginners.
The corporation has so far procured about 88 lakh bales for the current season, nearly 30% of the national estimated crop. Last month, the Cotton Advisory Board (CAB) lowered its output estimate to 290 lakh bales from the earlier 322 lakh bales due to delayed sowing and erratic monsoon.
?We have so far achieved sales volume of about 55 lakh bales because of our bulk discount offer. I think sales may slowdown in the days to come as majority of mills have covered its requirement as they generally buy cotton for 2-3 months? consumption,? said a top CCI official, who did not wish to be quoted.
?The corporation is offering a cash discount of Rs 400 per candy (each of 356 kg) on bulk purchases between 10,000 and 25,000 bales and also providing Rs 450 per candy on the buying between 25,000 and 50,000 bales. Similarly, millers are getting a discount of Rs 500 per candy on bulk purchases between 50,000 and 2 lakh bales and Rs 650 per candy on purchase of 2 lakh bales or more,? an official said.
During the current month, CCI has increased its sale prices by Rs 700-1,000 per candy on sustained buying interest by mills amid reduced arrivals at the major cotton trading centres.
?CCI has suspended the sales of two major varieties, Gujarat Sankar-6 and Maharashtra Bunny. As a result, private ginners may shift their buying to the open market,? a leading cotton trader said.
Total arrivals of raw cotton in the country have so far reached to 250 lakh bales.
?Daily arrivals across the country have come down to 90,000 bales. There are some buying interests from southern mills. I expect traders have struck deals to import at least 16-17 lakh bales so far and nearly 13 lakh bales have already arrived in the market,? Kishor Shah of M/s Shree Rang Cotton said.
?The government has hiked MSP in cotton for this season. As a result, domestic cotton prices are ruling higher than international markets. I believe imports will increase substantially and export will not be possible under the present scenario,? he added. Cotton price may remain steady in the next few days and S-6 may hover around Rs 21,000-21,500 per candy, he said. Sankar-6 and Kalyan V-797 in Gujarat are quoted around Rs 21,500 and Rs 15,500 per candy, respectively.