Cotton procurement by the Cotton Corporation of India (CCI), a nodal agency set up under the ministry of textiles for trade and procurement of cotton, has procured around 6 lakh quintals in Madhya Pradesh till date from the start of the new cotton season.
CCI has set up 21 procurement centers in MP and this is the highest procurement in the last two years.
Cotton arrivals picked up from October in spot markets and as cotton prices slipped below govt set Minimum Support Prices (MSP), CCI intervened and started procurement from the spot markets.
“We have procured around6 lakh quintal cotton so far in MP since October. We will continue purchases until farmers bring their produce to the spot markets. Market prices have improved and ruling around MSP,” said a senior official involved in the procurement exercise in MP wishing anonymity.
The nodal agency is procuring cotton from leading cotton cultivating states in the country
The government has fixed MSP for medium staple cotton at Rs 6,620 per quintal and for long staple cotton at Rs 7,020 per quintal.
Cotton arrivals have gradually dropped in the spot markets and are expected to slip further in coming weeks, said traders.
“Flow of arrivals from farmers was very high in November but now daily supplies are gradually coming down. Going ahead there will be further drop in supplies but until we get supplies as per our parameters, we will continue purchases. Last year, we did not enter the market because prices were well above the MSP,” said the official.
The trade body Cotton Association of India in January had said that the season was depressing for farmers as cotton rates were trading under MSP by 5 to 20 per cent. Though a jump in supplies lately, aided processing in spinning mills with mills in north India and central India running at almost 100 per cent capacity and in south India at around 80 per cent capacity.
