Comments
State-run Cotton Corporation of India (CCI), which has made a record procurement of about 98 lakh bales so far, will continue to purchase the fibre crop at the minimum support price (MSP) till September, the new Chairman and Managing Director, PK Agarwal, has said.
“We will be there in the market up to September 30. No farmer will be put into trouble,” Agarwal, who took over as CMD of CCI on June 1, said. CCI expects to procure another 5-7 lakh bales and total purchases exceeding 1 crore bales in the 2019-20season.
Procurement on
Purchases by CCI are currently on in Vidarbha, Telangana and Karnataka, where prices are still below the MSP, ruling in the range of ₹4,900-5,250 per quintal. Cotton MSP for 2019-20 is at ₹5,525 per quintal.
Agarwal said the market arrivals are almost complete. In Vidarbha, 92 per cent of the crop has arrived, while Telangana has seen market arrival of 95 per cent. The Cotton Associationof India has revised its projections estimating the 2019-20 crop at 330 lakh bales of 170 kg each.
With slowing market arrivals, the prices have begun improving, a trend that should augur well for CCI, which has announced a discounted pricing scheme recently to liquidate its stocks. CCI has a stock of about 9 lakh bales from 2018-19 season and about 98 lakh bales from the purchases made in the current season.
Trade sources said CCI has seen muted response for its discount scheme, so far, as the prevailing market prices are lower than the discounted price. Cotton prices are currently ruling around ₹35,000 per candy of 356 kgs, while CCI’s discounted price ranges from ₹36,600 to ₹38,400 for the 2018-19 stocks and Rs ₹37100-38900 for the 2019-20 crop.
Agarwal said the discount scheme is structured in such a way that it can cater to all segments of the industry. The bulk buyers have to be compensated with adequate discount, he said.
Prices improve
Agarwal said the Covid lockdown had hit the demand for cotton from the spinning mills. “Now the mills have started functioning, there will be a gradual improvement in demand by the month-end or first week of July. Many of the mills have come up to 50 per cent of their working capacity. Whatever inventory they are having is sufficient to run maximum for one to one and half months,” he said.
“The market is improving now. We are having a close watch on the domestic and the international prices,” Agarwal said, adding that the price offered by CCI was attractive for quality cotton. So far, about 60,000 bales have been sold under the bulk discount scheme.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.