Government buys 20.74 lakh quintals of cotton so far at MSP

NEW DELHI: The government has procured 20.74 lakh quintals of cotton at the minimum support price (MSP) so far in the 2012-13 marketing year that began from October, Parliament was informed today.

In the wake of falling domestic prices, the government had last month announced it would procure 90 lakh bales (of 170 kg each) of cotton at MSP this year to protect the interests of growers. State-run agencies CCI and Nafed were designated to undertake the procurement operation.

" Cotton Corporation of India (CCI) and Nafed together made procurement of 20.74 lakh quintals of cotton under price support scheme up to November 28 of 2012-13 season (October-September)," Minister of State for Agriculture Tariq Anwar said in a written reply to the Lok Sabha.

The two agencies intervene in the market for undertaking procurement with the objective that the market prices do not fall below the MSP fixed by the government, he said.

Currently, the MSP of medium staple cotton has been fixed at Rs 3,600 per quintal, while long staple cotton is Rs 3,900 per quintal.

Domestic prices have come under pressure taking cues from weak global prices following a sharp decline in global trade and increase in world stocks even as India's consumption is showing rising trends.

According to the Cotton Advisory Board, the country's total cotton production is estimated at 33.4 million bales, while consumption at 26 million bales and exportable surplus at 7 million bales.