Cotton Corporation of India (CCI) is set to buy 10 million bales of 170 kg each if cotton prices fall below the minimum support price (MSP). Prices are above the MSP at Rs 5,900 per quintal in north India, where fresh crop has started arriving.
The MSP of cotton for the 2019-20 season is Rs 5,550 per quintal as against Rs 5,450 per quintal in the previous year. “Currently, cotton prices are ruling above the MSP. It looks like prices will not decrease much in October,” said Dr P Alli Rani, chairman, CCI, while speaking on the sidelines of the annual conference in Jalgaon.
Rani thinks the CCI may have to intervene in the market in November.
CCI has been operating 358 procurement centres this year. “If required, we can open more centres,” she said. Right now, the biggest concern among cotton traders is whether the CCI will enter the market. Market prices move up when CCI begins procurement at MSP. Of the 1.1 million bales procured by CCI in 2018-19, the government entity has sold only 200,000 bales.
“We have insisted on getting correct value for our crop,” Rani said, indicating that the spinning industry preferred to import cotton of the same quality cotton rather than buying it from CCI.