CCI starts selling cotton from its stock
06-Mar-2025 04:04 PM
The Cotton Corporation of India (CCI) has started selling its cotton stock purchased from farmers at the minimum support price (MSP) for the 2024-25 marketing season. However, the sale process is facing some challenges as textile mills are mainly interested in purchasing high-quality cotton, and the base price of CCI's cotton is higher than the prevailing market prices.
Here are the key points from the current situation:
Price Discrepancy: CCI's base price for cotton is set between Rs 54,000 and Rs 55,000 per candy (356 kg), while the average price in the wholesale market is between Rs 52,500 and Rs 54,000 per candy. This price difference is discouraging millers and traders from buying CCI's cotton, as they are hesitant to pay the higher price.
Limited Purchases: On March 5, CCI offered 6,02,300 bales (each bale is 170 kg) of cotton for sale, including both new and old stocks. However, only 6,800 bales were purchased by millers, and traders bought just 300 bales.
Cotton Arrivals and Purchase Process: So far, over 94 lakh bales of cotton have been purchased by CCI during this marketing season, with purchases still ongoing across major producing states. The largest stock of cotton is held by CCI, which has purchased more than 40 lakh bales from Telangana, followed by Maharashtra (28 lakh bales) and Gujarat (11 lakh bales).
MSP and Wholesale Market Prices: The MSP for cotton for the current season is Rs 7,121 per quintal for medium fiber varieties and Rs 7,521 per quintal for long fiber varieties. This MSP is slightly above the current wholesale market prices, which is contributing to the lack of enthusiasm from mills and traders.
Domestic Cotton Production: The Cotton Association of India has projected domestic production at 301.75 lakh bales for the current season, which is slightly higher than the initial estimate by the Union Agriculture Ministry. This increase in production, coupled with a higher MSP, could put pressure on CCI to sell its stock at favorable prices.
In summary, while CCI has substantial cotton stocks, its higher-than-market prices and the preference for good-quality cotton are making it difficult for the corporation to sell large quantities. If this trend continues, CCI may face challenges in offloading its cotton stock in the coming months