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The Cotton Corporation of India, the government body buying cotton at minimum support price from farmers, will be left with an inventory of 30 lakh bales (of 170 kg each) by September-end if it continues to offload cotton at a slow pace, said Dhiren N Sheth, President, Cotton Association of India.
The huge inventory does not augur well for the new season that would begin in October and the government body would be forced undertake another massive operation to support prices, he said.
CCI procured about 87 lb in this season. It has been offering about 50,000 bales (of 170 kg each) on a daily basis on its e-auction platform. However, mills are buying only 80-90 per cent of the offering as the base price on the platform is on the higher side.
“Until now, CCI has not sold a single bale in the international market. In order to liquidate their stock, it is necessary for the CCI to sell at least some cotton in the international market,” said Sheth.
The Association has reduced its crop estimated for the coming season (starting October) to 382.75 lb from its earlier forecast of 384.50 lb in April.
The current estimate foresees total supply of 453.65 lb and domestic consumption of 310 lb.
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