The Cotton Corporation of India ( CCI) has halted its procurement drive for the time being as prices have gone up recently...
The Cotton Corporation of India ( CCI) has halted its procurement drive for the time being as prices have gone up recently. The government agency has procured around 86.09 lakh bales, failing to surpass the 2008-09 record when it had bought some 89 lakh bales.
With cotton prices moving up, arrivals are weakening and therefore there is no need for CCI to intervene, BK Mishra, CMD, CCI told FE.
Cotton prices have increased marginally by R50-100 per bale resulting in market prices of R4,100-4,150 per bale both in Gujarat and the South, Mishra said.
CCI has stopped procuring cotton from Telangana and Andhra Pradesh. Cotton seed prices are around R700-1,800 per quintal and traders are purchasing cotton from farmers at a price of around R4,000 per bale.
Despite a huge demand from textile bodies in the South, the agency is not willing to sell cotton at base price. By the next week, CCI is likely to take a decision with regard to floating a global tender for offloading its stocks.
Despite demand by traders’ body Cotton Association of India, Mishra said the CCI doesn’t intend to offload huge stocks immediately as it could worsen an already glut-like situation in the market and hurt realisations of farmers selling cotton now.
The agency is holding stocks worth around R16,000 crore now. It has been putting up cotton for sale through the e-auction mode and has sold some 5 lakh bales so far. Mishra said traders are welcome to purchase cotton at the given market rates.
Around 50,000 bales are being put up for auction on a daily basis. The Southern India Mills’ Association has appealed to textiles minister Santosh Kumar Gangwar to direct CCI to offload cotton and avoid rate speculation.This suspension of sale by the CCI is causing concern among the mills as quality cotton is not available in the open market.
Senior officials said the government is not willing to relent to pressure of quantity and reduce prices to base rates. We will be selling cotton at par with market prices, Mishra said. For disposal of procured cotton in the domestic markets, however, CCI is waiting for directions from the Union textiles ministry.