High cotton prices hit CCI business plans

CHANDIGARH: Government-owned Cotton Corporation of India ( CCI), which was keen to buy cotton directly from farmers at a minimum support price varying from 2,000 (short staple) to 4,200 (extra long staple) per quintal, finds no business now with wholesale prices at record 4,400 per quintal.

In Punjab, commercial operations by CCI have begun since October 9 whereas in Maharashtra the procurement started on October 11. CCI is operating in the market in competition with other buyers including private trade and mills by paying competitive prices varying from 3,600 to 4,400 per quintal in Punjab for purchases of kapas from the cotton growers.

“The price and quantity of the purchases would keep varying every day. As of now, there has been negligible purchase owing to less arrivals in the mandis. After Dusshera, we expect the procurement to pick up,” said a CCI official while adding that the cotton purchased would be sold simultaneously in the market.

The support price for medium staple length cotton has been fixed at 2,500 per quintal and that for long staple length cotton of above classes has been fixed at 3,000 per quintal. In Maharashtra, procurement of bunny/brahma cotton variety from the Aurangabad belt has just started and CCI officials expect to start procuring from the Vidarbha belt by next week.

Prices are varying at 4,100 to 4,300 per quintal whereas MSP is at 3,000 per quintal. In Rajasthan, CCI has opened its purchase centre in Ganganagar and Bhilwara but has not been able to make any purchase.

The corporation has not opened any purchase centre in Gujarat and Haryana but is keenly watching the market and propose to open once the price and arrivals are stable. ”Farmers are holding the crop in anticipation of better returns,” said a CCI official.
The CCI has been able to procure over 1000 quintal cotton till Tuesday from the southern ‘Malwa’ belt in Punjab. It is expected that 22 purchase centres will open in the state. Total cotton arrivals in Punjab mandi was over 10,000 bales till Tuesday, compared to over 15,000 bales in the previous year during the corresponding period.