The Cotton Corporation of India (CCI) is set to start purchases of the fibre crop for the 2018-19 season at minimum support price (MSP) from Telangana over the next few days.
CCI has geared up for large-scale MSP operations across the country as the Centre announced an MSP increase of 26-28 per cent for the fibre crop over last year. For the long staple variety, MSP has been increased by 26.16 per cent to ₹5,450 per quintal, while for the medium staple, MSP hike has been 28 per cent to ₹5,150 per quintal.
“We have already opened 330 centres and if required, may go upto 390,” said P Alli Rani, Chairman and ND, CCI. Though CCI has opened 330 procurement centres across key growing states since October 1, purchases at support price have not begun so far due to the higher moisture content of over 12 per cent in cotton offered to CCI, she said.
Procurement is likely to begin in the next few days in Telangana since the moisture content is approaching 12 per cent there due to dry weather, Alli Rani said. Historically, the MSP procurement in cotton generally starts in the third or fourth week of October.
Market arrivals in small quantities have begun across the key producing States of Punjab, Rajasthan, Gujarat, Telangana, Maharashtra and Karnataka. Trade sources estimated the cotton arrivals at around 40,000-50,000 bales of 170 kg each. Prices are hovering between ₹5,200-5,600 per quintal across various markets, depending on the moisture content.
“Millers and ginners are yet to start purchases as the moisture content is still high. Also, there is no demand from multinationals as they are still holding old stocks. We expect the market to pick up after October 20, when arrivals pick up,” said Ramanuj Das Boob, a ginner in Raichur.
Lower crop size
The Cotton Association of India, the the apex trade body, in its first estimates, has pegged the 2018-19 crop size at 348 lakh bales, lower than the 365 lakh bales produced in 2017-18 on account of deficient rains hurting the output in states such as Gujarat, Maharashtra and Karnataka. Also cotton acreages this year were marginally lower at 120.64 lakh hectares as against 121.72 lakh hectares in 2017-18.
“Whatever be the crop projections, we will be procuring all FAQ cotton offered by the farmers,” Alli Rani said. Last year, CCI had procured less than four lakh bales under MSP operations, since the market prices rose quickly and went above MSP rates. This year since MSP rates are much higher, the probability of higher volumes being purchased under MSP is high, Alli Rani added.
Meanwhile, about 270 ginning mills in Telangana are expected to start cotton purchases from Wednesday. The Marketing Department will open 11 procurement centres. “Some of the centres have already begun purchases,” a senior Telangana government official has said. “The farmers should get in touch with the ginning mills and the Cotton Corporation of India regarding the sale of their produce.”
He advised the farmers not to go for distress sale and ensure the moisture content is not very high in order to get a good price. Unginned cotton was quoting a minimum price of ₹5,450 a quintal in the Warangal yard and a minimum of ₹5,000 at the Adilabad yard.