As cotton prices ruled firm for most of the 2018-19 marketing season starting October, the state-run Cotton Corporation of India (CCI) could purchase only 10.7 lakh bales under the MSP scheme. The bulk of the procurement — over 70 per cent — has been from Telangana followed by Maharashtra.
According to CCI, market arrivals of cotton till April 1 stood at 254 lakh bales of 170 kg each. The Cotton Association of India (CAI), the apex trade body, had pegged the crop size at 328 lakh bales for the year.
“Presently, raw cotton prices are ruling above MSP across the country and farmers are getting higher rates than MSP. Therefore, procurement under MSP has slowed down substantially,” said P Alli Rani, Chairman-cum-MD, CCI. However, the Corporation is keeping a close watch over the market scenario. Also, CCI has been buying cotton at market rates to ensure there is no shortfall of the fibre crop in the market for consumers. Further, Rani said that as prices are ruling above MSP rates almost in all cotton growing states, it shows mills/traders are actively procuring cotton at competitive rates.
Cotton prices, which have gained in recent weeks, are expected to stay firm going ahead as the crop has been short by 10-12 per cent over last year, said Atul Ganatra, President, CAI. There has been a sharp decline in market arrivals in recent weeks. On April 2, market arrivals stood at 75,000 bales as against 1.35 lakh bales on the same day last year.
Based on the current trend in market arrivals and the latest stock position with various stakeholders, there could be a further downward revision in the crop estimates for the year, Ganatra hinted.