September 10, 2015 Inventory seen at 5 lakh bales; agency readies for new season starting October Mumbai, September 9:
Cotton Corporation of India is fast unloading its stock of 25 lakh bales (lb) and expects to cut inventory to 5 lb before September-end, the close of cotton year 2014-15, even as it gears up for new season.
The agency had bought 87 lb of cotton worth about ₹17,000 crore from farmers as part of the Government’s minimum support price assurance and has now been auctioning them on its electronic platform.
Speaking to BusinessLine, BK Mishra, Chairman and Managing Director, CCI, said the domestic demand for the fibre is picking up and it managed to sell 62 lb for about ₹12,000 crore, so far.
“Of the remaining 25 lb, we are close to selling 15 lb in next few days and put another five lb on auction by end of this season. The demand has been strong even as we marked up prices keeping with the global trend,” he said.
Allaying fears that CCI will be left with huge inventory, Mishra said the industry is appreciative of the role being played by the corporation in ensuring that the supply is maintained at the fag end of the season and has expressed satisfaction on the quantity of cotton being auction monthly.
The textile industry needs 25 lb of cotton every month. Prices surge
The Corporation expects scanty rains in major growing regions of Maharashtra, Punjab and Gujarat to hit cotton output next year.
Strong demand coupled with lower output is expected to hold prices above the minimum support price leading to less intervention of CCI to support farmers, said Mishra.
Cotton (Shankar variety) prices have gone up by ₹1,200 per candy (of 356 kg) to ₹35,200 in last one month due to robust demand. Domestic cotton production in 2014-15 is expected to be 354.75 lb – marginally down from 359 lb recorded in 2013-14. Cotton output in the season starting next month is expected to dip to 340-350 lb as the acreage under fibre crop has dipped eight per cent to 114.17 lakh hectares from last year’s 124 lakh hectares. Lower output
This apart, poor monsoon in most growing States and pest attack is threatening cotton output in the coming season.
“ There are whitefly pest attacks in Punjab, Haryana and Rajasthan. The drought-like situation may dampen cotton output in Maharashtra. We may have to buy a small quantity in Andhra Pradesh and we are well prepared for it,” he said.
After a good start, rains have been patchy in Gujarat – a major cotton-producing State. Rainfall in the State was 28 per cent below normal.