CCI almost stops procurement as cotton prices rise up to Rs 6,000/quintal

With prices of quality raw cotton rising up to Rs 6,000 per quintal this week, cotton procurement by the Cotton Corporation of India (CCI) has almost come to a stop, top officials at the CCI said. Some procurement is happening in rural areas.

“Cotton procurement under the minimum support price (MSP) programme has reduced with prices going up. Cotton arrivals are staggered with around 210 lakh bales having already arrived into the market with another 140-150 lakh bales remaining with farmers. The CCI has procured 85 lakh bales and may procure another 5-10 lakh bales,” PK Aggrawal, CMD of CCI, said. The MSP is at Rs 5,825 per quintal for the best grade of cotton.

The CCI had originally estimated a purchase of 100-125 lakh bales at the start of the season. Wholesale prices of cotton in most mandis in Maharashtra ranged from Rs 5,400 to Rs 5,500 per quintal in the last week of December.

Aggrawal said prices were getting aligned since the demand was slowly returning back to normal after the Covid pandemic. Capacity utilisation in textile mills is also returning back to pre-Covid levels, he said. Daily arrivals have reduced to some 70,000 bales a day from a high of 3 lakh bales on a daily basis at December-end, he said.

Bangladesh, meanwhile, has emerged as the largest exporter so far with nearly 14 lakh bales being exported to the country. Aggrawal said although the agreement between the two governments is yet to happen, around 20 lakh bales have so far been exported to the country, he said. The CCI has a floated a daily tender for exports and expects a good response from China and Vietnam. China may import 25-30 lakh bales and Bangladesh is expected to import some 30-35 lakh bales from India, Aggrawal said. Vietnam is likely to import around 4-5 lakh bales.