Considering commercial purchase of cotton though it will wait for the right time
The Cotton Corporation of India (CCI) is prepared to buy cotton from the market at minimum support price (MSP) if there is a need to do so.
An official of the CCI told The Hindu that though it was ready, the Corporation did not expect any requirement of its intervention in the cotton market for MSP operations, except in Andhra Pradesh.
Even in Andhra Pradesh, cotton was traded at Rs.4,200-4,500 a quintal while the MSP was Rs.4,000 a quintal. Heavy rains had affected three lakh to four lakh bales of cotton in Andhra Pradesh.
The damaged cotton that was coming to the market was getting a lower price, he said. The CCI would be able to buy at MSP only the cotton bales that would meet the quality norms, he pointed out. “We are ready for MSP operations, maybe by November-end or in December when cotton arrivals will increase,” the official said. However, even in Andhra Pradesh, there might not be a need for the CCI’s intervention, the official added.
The Corporation was also considering commercial purchase of cotton though it would wait for the right time, he said.
The financial requirement for the MSP and commercial operations would be met through internal funds, he added.
Cotton prices had dropped during the last few weeks because of increase in arrivals. The price of Shankar-6 variety of cotton (spot buying) was Rs.40,500 a candy on Saturday, and it was nearly Rs.6,000 higher a month ago. “Transactions are not high though arrivals are going up in the cotton markets. If the trend continues for another three weeks, prices might drop to MSP level,” says K. N. Viswanathan, Vice-President of Indian Cotton Federation.