The Cotton Corporation of India, Ministry of Textiles established in the year 1974 has been exercising commercial cotton operations and cotton minimum support price operations to protect the interests of the cotton farmers and the predominantly cotton based textile industry. CCI had to exercise MSP operations during the start of the 2018-19 season and also during the current cotton season due to the fall in market prices, sluggish market conditions globally and considerable increase in the domestic crop output.
CCI could not sell the cotton procured in the 2018-19 season to the tune of nine lakh bales due to drop in prices. During the current season, CCI has procured over 60 lakh bales of cotton under MSP, the cost of which is much higher than the market price. Hence, CCI has been quoting higher prices than the market price and practically there was no off-take except the mandatory purchases by the public sector spinning mills. The cotton industry has been pleading with the Ministry of Textiles to sell the cotton at market prices to have stability in the cotton market and protect the interests of the spinning mills and its downstream power loom and handloom sectors.
In a press release issued on Tuesday, Ashwin Chandran, Chairman, The Southern India Mills Association expressed thanks to Union Textile Minister Smriti Zubin Irani for the intervention, enabling CCI to offer volume based bulk discounts for its 2018-19 cotton and protecting the interests of MSME spinning mills by offering the discounts from 500 bales and restricting the same at 10,000 bales. The discount ranges from Rs.3,200 to Rs.4,400 per candy of 355 kgs and CCI has quoted Rs.46,400 per candy for 30 mm cotton of fair average quality while the current market price is around Rs.40,500.
SIMA Chairman has stated that considering the free lifting period and quality claimed by CCI for its cotton, the prices would come closer to the market prices and mills might commence procurement from CCI. Mr Ashwin hopes that CCI would soon offer its current year MSP cotton at market prices at constant intervals till season end and facilitate stability in cotton prices.