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The Cotton Corporation of India (CCI) will not release the entire stock held by it in the market immediately despite the textile industry demanding it do so, to bring cotton prices down.
While the CCI, a Central Government undertaking, has already started off-loading small parts of the 86 lakh bales (of 170 kg each) of cotton held by it, the Textile Ministry wants it to sell its stock in phases over the remaining five months of the current cotton marketing year ending September to fetch better prices and minimise losses.
Time till September “The CCI procured the cotton from farmers at a minimum support price, which was much higher than the prevailing domestic prices, earlier this year. We want it to realise as high a price as possible in the domestic market when it releases the stock, so that it can minimise its losses.
It has time till September to sell it and should use it to its advantage,” a Textile Ministry official told BusinessLine . The domestic textile industry has raised concerns over the stocks held by CCI and has demanded immediate release to avoid “artificial” shortage.
Hoarding alleged The Confederation of Indian Textiles Industry (CITI) wrote to Textiles Minister Santosh Gangwar complaining that with the CCI holding large stocks of cotton, private traders were using it as an opportunity to hoard cotton to push up prices even further.
“The CCI is a public sector undertaking and it will take its own commercial decision. It is best for it to release the stock in phases, keeping factors such as domestic prices, cost of carrying cotton, interest rate and the international market conditions in mind,” the official said.
The highest cotton procurement done by CCI in the on-going year is from Telangana from where it produced 36.89 lakh bales, followed by 17.63 lakh bales from Maharashtra and 17.53 lakh bales from Andhra Pradesh, the official said.
“The CCI jumped into action last October when cotton farmers were crying about plunging cotton prices and higher estimated outputs. It has done a very good job and there are no complaints from farmers,” the official added.
So far, CCI has sold 5.68 lakh bales in the market.
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