Stock sales by state-run Cotton Corporation Of India (CCI) have crossed one million bales for the first time in two years.
Stock sales by state-run Cotton Corporation Of India (CCI) have crossed one million bales for the first time in two years, although arrivals of the fibre in the market have slowed down.
The CCI sold 1.08 million bales of cotton until May 7 in the current marketing year that started on October 1, a senior official with the agency told FE. This is the highest offloading of stock, since 2012-13 when the agency had procured 2.29 million bales. CCI is selling 70,000-75,000 bales of cotton on a daily basis, said the official. One bale equals 170 kg.
CCI started offloading substantial stocks since April after the textile industry had complained to the textile ministry of an “artificial shortage” in the market created by the state-run procurement agency. Refuting the allegations, CCI chairman BK Mishra had said the country was expecting a bumper harvest of 39 million bales in 2014-15, way above the requirements by textile mills, especially when export demand remained tepid.
Recently Mishra had said the agency had procured around 8.7 million bales of cotton from farmers — just a tad short from the record 8.9 million bales of purchases in 2008-09. CCI would factor in interests of small and marginal mills while undertaking sales, he had said.
The CCI procures cotton from farmers at MSP to avoid distress sales by them and sells the stock in the market later.
Any losses out of the procurement operation is reimbursed by the government.
Cotton arrivals down nearly 3%.
The supply of cotton has dwindled in the current year, in sync with the recent downward revision of the government’s crop estimate for 2014-15. Cotton arrivals touched 34.5 million bales as of Thursday, down 2.8% from 35.5 million bales a year before, said the CCI official.
The government recently revised down the country’s cotton production forecast to 39 million bales for 2014-15 from the previous estimate of 40 million bales, citing unseasonal rains. The country had harvested a record 39.8 million bales in 2013-14.
The state-run Cotton Advisory Board has projected cotton exports at 7 million bales this year, compared with 11.79 million bales in 2013-14, on poor demand from top buyer China.