Commodities

CCI buys 1.2 million bales of cotton at MSP

Our Bureau Mumbai | Updated on November 25, 2019 Published on November 25, 2019

File photo   -  THE HINDU

Estimates cotton production to increase by 13.6 per cent to 35.5 million bales this season

Cotton Corporation of India (CCI) has purchased 1.2 million bales or about one per cent of total cotton arrivals in the ongoing season that started in October.

Cotton prices was down below the minimum support price (MSP) fixed by government in September and forced CCI to buy in Punjab, Haryana, Gujarat and Rajasthan.

The cotton crop in Maharashtra is estimated to be delayed, as unseasonal rains damaged around 1.9 million bales in the state. The damaged crop is estimated to fetch prices that would be 30-35 per cent lower than the MSP due to high moisture content, said India Ratings and Research report.

The CCI has estimated cotton production to increase by 13.6 per cent to 35.5 million bales (of 170kg each) this season on the back of greater-than-average rainfall in the country and increased sowing by farmers. Area under cotton cultivation has increased by 6 per cent year-on-year during the current season.

India’s raw cotton exports fell by 75 per cent in the first half of this fiscal due to high domestic prices and the availability of cheaper cotton from Brazil, the US and Vietnam.

The spinning industry saw disruptions in production in September quarter owing to reduced demand and volatility in cotton prices. While demand from China improved marginally in August and September, a further improvement would be healthier for the spinning industry, which has been facing margin pressure and low capacity utilisations.

Fabric exports improved in first half of the fiscal owing to an improvement in the quality of Indian fabrics and addition of newer markets. Exports in first half of this fiscal was up at Rs 12,489 crore against Rs 11,611 crore.

A sharp rise in imports of cheap apparel from Bangladesh has rendered the Indian textile value chain uncompetitive. Readymade garments output recorded a de-growth of 14 per cent month-on-month in September due to a steep fall in demand from the US and UK.

Published on November 25, 2019
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