Cotton Corp begins procurement in Maharashtra, Karnataka and Telangana

Cotton Association of India (CAI) has estimated its fibre crop for the 2019-20 season at 354.50 lakh bales of 170 kg each

The Cotton Corporation of India (CCI) has commenced procurement of the fibre in Maharashtra at minimum support price (MSP), top officials of the corporation said. The Corporation is expected to begin procurement from Jalgaon region in the state from November 20. CCI has so far begun procurement in Punjab, Rajasthan, Haryana and Gujarat, and now in Maharashtra, Telangana and Karnataka.

Procurement in Odisha and Andhra Pradesh is yet to commence since Odisha is a late crop state and Andhra Pradesh is close to Tamil Nadu a major consumption centre, CCI chairman and managing director P Alli Rani said.

The procurement in Maharashtra is being done through the Maharashtra State Cotton Growers Federation, a sub-agent of CCI. The Federation has established cotton purchase centres at Dharangaon, Parola, Amalner, Yaval, Dhule and Malegaon in Nashik. CCI is setting up purchase centres at Jalgaon, Erandol, Pachora, Jamner, Chopda, Bhusaval, Shahda and Nandurbar. These centres are expected to be opened in phases since the moisture content is currently high. Farmers are to get Rs. 5,450-Rs. 5,500 per quintal while market prices are much lower at Rs. 5,100 per quintal for better quality cotton. The MSP of cotton for the 2019-20 season is Rs. 5,550 per quintal, against Rs. 5,450 per quintal in the previous year.

P Alli Rani said the Corporation had procured around 40,000 bales and the total arrival in the market until date has been close to 25 lakh bales. Around the same time last year, CCI had procured barely 2,000 bales, she said. “This is just the start of the season and arrivals should pick up as the season progresses. The monsoons have ended across the country and the FAQ (fair average quality) quality should improve.” The MSP ranges between Rs. 5,450 and Rs. 5,550 per quintal and the market price in many places is lower than that, she said.

According to Pradeep Jain, president for Khandesh Cotton Ginners Association, arrivals have dropped to minimal levels after market reports that CCI is expected to commence procurement in the state. Prices for cotton with high moisture content is currently selling at Rs. 3,500-Rs. 4,500 per quintal. Monsoon in the state a couple of weeks ago had made it difficult to harvest cotton. CCI might not buy this cotton since the moisture content is high, he said. “The quality will improve as the season progresses.”

CCI’s purchase commenced last month in the North after a gap of nearly three years when the government had given permission for direct purchase of the crop. Last year, CCI had procured 10.70 lakh bales under MSP.

Cotton Association of India (CAI) has estimated its fibre crop for the 2019-20 season at 354.50 lakh bales of 170 kg each which is higher by 42.50 lakh bales compared to the previous year’s 312 lakh bales.

The increase in crop estimated for the 2019-20 season is on the account of higher acreage under cotton than that of the previous season. Moreover, the CAI estimates yields to be higher as the country had received a good rainfall this year.

However, there are reports of damage to the crop in some pockets due to flooding on account of excess rains. Keeping this in mind, increase in crop is restricted to 13.62%.

According to Alli Rani, the highest procurement by CCI so far has been in 2014-15 when the agency had procured around 96 lakh bales. “The following years have been no MSP years and last season as well, prices have been 28% higher than MSP. Everyone said that procurement would be required but nothing happened. CCI purchased barely 10 lakh bales during that season,” she had said. Rani said India’s cotton production in 2019-20 (October-September) was likely to be at least 350-355 lakh bales, up nearly 4% from the previous year due to higher acreage and better weather conditions in most of the growing regions. In the past few years, India’s cotton output has averaged around 350 lakh bales.