Cotton arrivals pick up speed, but MSP remains tricky issue

28 Oct '15

2 min read

Cotton arrivals across India increased to approximately 50,000 bales per day and with the industry hoping for supportive lint prices, the market has become steady, according to media reports. The industry expects the 2015-16 cotton crop volume to range between 32.5 million to 38 million bales of 170 kg.

According to industry data, the Cotton Corporation of India (CCI) has been left with an unsold stock of approximately 12 lakh bales for which there is now a good demand because of high moisture content in the new cotton arrivals.

Earlier this week, the Indian Cotton Federation said that the CCI has planned to procure cotton to support the farmers to address the price fall below MSP levels. Textile mills have recently demanded the revamp of CCI for a fair cotton trade policy.

Cotton arrivals so far this season have touched 5 lakh plus bales against 4 lakh plus bales in the last season although acreage has shrunk from 126 lakh ha in 2014-15 to 117 lakh ha in 2015-16. The CCI expects cotton production to be less than the last year's by 5-10 lakh bales because of smaller acreage.

Across Punjab, Haryana and Rajasthan, Gujarat and Maharashtra, the arrival of cotton is gathering speed with approximately 10,000 bales per day. Cotton arrivals in Madhya Pradesh and Andhra Pradesh are 6000 and 5000 bales respectively.

Meanwhile the minimum support price for cotton could spark unrest among farmers in Telangana. The Centre has announced a MSP of Rs 4,100 per quintal for cotton. But the expected slump in output by 5-10 lakh bales this year, due to various reasons including white fly attack and sparse rains and an expected rise in cotton prices have spurred some farmers in Telangana to demand an MSP of Rs 5,000 per quintal. (SH)

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