With cotton prices falling steadily over the last few days, Cotton Corporation of India is gearing up to procure the fibre at the minimum support price in Telangana, Karnataka, Maharashtra and Odisha.

The corporation has 14 branches with 300 centres across major cotton growing States.

Cotton prices are currently ruling at ₹37,000-38,000 a candy (of 356 kg) against ₹40,000 sold last week.

The Government had fixed a minimum support price (MSP) of ₹35,000 a candy for long staple cotton and ₹32,500 a candy for medium staple.

CCI last conducted the MSP operation in the cotton season 2012-13, and procured 23 lakh bales (of 170 kg each) worth ₹4,600 crore in Andhra Pradesh.

Restricted procurement Speaking to BusinessLine , BK Mishra, Managing Director, Cotton Corporation of India, said the procurement this year will be restricted to select States as prices in Punjab, Rajasthan, Haryana and Gujarat were expected to prevail over the support price. “It is too early to fix a target for procurement as it all depends on arrivals and demand.

However, many banks have shown an interest and can fund us, in case we have to intervene in the market on a large scale. We are prepared for any eventuality,” he said.

Arrivals India is expected to produce about 400 lakh bales of cotton this year, worth about ₹70,000 crore.

Though the cotton arrival season was expected to begin in November this year due to the delayed monsoon, cotton arrivals have already started from well-irrigated regions of Punjab.

A fresh crop of about 4,000 bales hit the Punjab market last week. India is also expected to surpass its earlier record harvest of 403 lakh bales, with the area under cotton crop touching 127 lakh hectares against 117 lakh hectares recorded last year. The sentiment in the cotton trade has turned bearish after China, one of the world’s largest importers of cotton, clamped restrictions on shipments in order to offload its inventory.

Shipment restrictions The drop in cotton prices and lower demand in China may lead to India’s cotton exports dipping to 90-100 lakh bales against 114 lakh bales registered last year.

Despite restrictions, the mills in China have to import 50 lakh bales to remain competitive. Markets expect it to source about 20-25 lakh bales from India.

Cotton prices in international markets have dropped 27 per cent this year on prospects of a good harvest in the US backed by favourable weather condition.

Cotton for December delivery dropped 2.4 per cent to a near five-year low of 61.57 cents on ICE Futures in New York on Wednesday.

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