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NEW DELHI: Cotton Corporation of India (CCI), the nodal agency for government procurement, may not purchase cotton for its commercial operations this season owing to high domestic prices. However, CCI would continue to procure on behalf of the government at minimum support prices.

“We will not conduct commercial operation this year if domestic prices continue to remain firm. Chances of losses are very high if we purchase above MSP as the support price is already high,” CCI Chairman and Managing Director, Mr Subhash Grover said.

CCI procures cotton for its commercial operations at market price, usually above MSP. Out of its total procurement of 27.5 lakh bales (One bale is equal to 170 kg) last year, commercial purchase accounted for about 80 per cent.

It had earned profits of Rs 22.5 crore last year from commercial operation. It sells cotton in overseas markets on a daily basis apart from supplying to domestic spinning mills. However, it does not sell directly to domestic traders.

Initially, CCI had plans to buy limited quantity for its own trading purpose. However, it has now decided to halt such operation for the time being in view of high domestic rates and falling global prices.

The cotton prices are ruling high this year following a significant hike in MSP. The support price of standard cotton (long staple) has been raised to Rs 3,000 per quintal from Rs 2,030 in the previous year.

The MSP of medium staple cotton has been hiked to Rs 2,500 from Rs 1,800 per quintal. - PTI

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