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CCI wrings hands in glee as cotton prices surge past MSP
04 Apr '09
2 min read
The Cotton Corporation of India (CCI), the state owned cotton trading firm and National Agricultural Cooperative Marketing Federation (Nafed) also a state owned entity are sitting on a huge stock of 29 million bales purchased in the just completed cotton season.
With stocks running out from the main cotton trading markets, cotton prices have started surging and have gushed past the Minimum Support Prices (MSP) in the open markets, in a few varieties, in which both the agencies are sitting on huge stocks.
The textile mills who in the last few months were working on a hand to mouth situation on expectations of a bail out package are now approaching CCI to take advantage of the discounts offered by the cotton trading firm on bulk purchases.
But this latent demand is also resulting in a growth in prices of a few varieties of cotton, which are now quoting above MSP levels, notably of the Gujarat grown Shankar-6 variety, which is now priced at Rs 1,500 per ton above the MSP price of 28,500 per ton.
This new development has raised the hopes of CCI which was expecting to lose money on its cotton stored in the warehouses as it was not able to attract prices over and above that of MSP prices and now hopes to make a tidy profit from its stocks.
With stocks running out from the main cotton trading markets, cotton prices have started surging and have gushed past the Minimum Support Prices (MSP) in the open markets, in a few varieties, in which both the agencies are sitting on huge stocks.
The textile mills who in the last few months were working on a hand to mouth situation on expectations of a bail out package are now approaching CCI to take advantage of the discounts offered by the cotton trading firm on bulk purchases.
But this latent demand is also resulting in a growth in prices of a few varieties of cotton, which are now quoting above MSP levels, notably of the Gujarat grown Shankar-6 variety, which is now priced at Rs 1,500 per ton above the MSP price of 28,500 per ton.
This new development has raised the hopes of CCI which was expecting to lose money on its cotton stored in the warehouses as it was not able to attract prices over and above that of MSP prices and now hopes to make a tidy profit from its stocks.
Fibre2fashion News Desk - India
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