The Cotton Corporation of India (CCI) has purchased 10,000 bales over the last few days for its commercial account due to low prices, according to its chairman-cum-managing director P Alli Rani, who said 70 lakh bales have been purchased under the minimum support price (MSP) operations till now. Nearly 65 per cent of the cotton has arrived in the market, she said.
Nearly 53 per cent of cotton procured so far this season is from Telangana. Gujarat, Maharashtra and Telangana are the top three cotton growing states in the country.
Though there has been a marginal rise in buying for the commercial account, the state-run corporation is hard pressed as MSP purchases are in full swing, Rani said.
This is probably the first time the commercial purchase is happening alongside the MSP operations. Last year, the agency had commenced commercial operations during end of March. The agency has floated a tender to purchase cotton at ₹39,400-₹39,500 per candy (1 candy =356 kg) from the open market through an electronic auction, according to a report in a top financial newspaper.
The MSP for medium-staple variety of cotton is ₹5,255 per quintal and ₹5,550 per quintal for long staple cotton. She said CCI is likely to purchase nearly 80 lakh bales under MSP operations for this season and could even buy up to 96 lakh bales subject to market conditions.
The Cotton Advisory Board’s provisional production estimate for this season is 360 lakh bales. The CCI has nine lakh bales stock of cotton from the previous seasons and 70 lakh bales from this season.
The Cotton Association of India has pegged 2019-20 crop at 354.5 lakh bales, compared with 312 lakh bales last year. CCI might look at exports, though it was not keen on it, she said, adding that it has received inquiries from Bangladesh for exports.
On the fall in global cotton prices, she termed it as a knee jerk reaction to the coronavirus outbreak and felt that the situation should settle in a few days.