CCI to build cotton reserves of 2.5mn bales (India)

Ministry of Textiles is monitoring, on a daily basis, the arrivals of cotton and the price situation across major Mandis. Although, currently the cotton prices are stable, averaging around Rs. 4000 per quintal, are ways above the MSP prices fixed at 3100 per quintal, negating the need for MSP operations. However, in order to secure the raw material supply lines for the domestic requirements of the textile sector, commercial operations by CCI have become imperative.

Cotton Corporation of India (CCI) has been directed to intervene in the market for commercial operations to build up reserves of 25 lakh bales till the cotton arrivals in the new cotton season 2012-13. This has been necessitated by the fact that the textile industry impacted by a slowdown is unable to carry stocks beyond 15 days whereas the mandatory carryover stock requirement of 60 lakh bales at 85% efficiency. CCI is expected to purchase at the prevailing market price approximately 10 lakh bales per month for the next two months.

This considered decision has been taken to ensure price stability in the market as also availability of cotton for domestic user industry, keeping in mind the varied interests of stakeholders across the entire cotton value chain, ranging from farmers, ginners, millers and traders.

CCI purchased approx. 11,000 bales at Rs. 4400 per quintal from major mandis across Gujarat.