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Govt starts buying cotton from markets

20
Oct '08
The country is expecting to harvest a bumper cotton crop in this season too. It is expected to be near about last cotton seasons record level of 31.5 million bales. The government has also recently hiked the minimum support price (MSP) by 40 percent recently.

But traders are absent from the market and this has resulted in market prices of cotton dropping below MSP levels for the first time in Punjab and Haryana. Ginners are reluctant to make fresh commitments due to the slow down and a fall in global prices.

New York cotton futures have touched a 16 month low last week and this has made ginners apprehensive. To arrest further fall in cotton prices the government may buy 15 percent of the crop in this season. The government owned procurement agency, Cotton Corporation of India (CCI) has begun buying of cotton from farmers since the last few days from across the country.

But this has not helped the situation, Open market prices are still quoted at a discount to MSP Prices. Fibre2fashion spoke to officials of CCI from Punjab, Haryana and Andhra Pradesh to get a better understanding of situation.

The CCI official from Haryana confirmed that they had indeed started purchasing from the market and had bought around 2200 bales till last week. The CCI official from Punjab said that MSP of J-34 variety is Rs. 2700 per 20 kg while market price had dipped to Rs 2340-2360 per 20 kg today.

Officials from Gujarat and Maharashtra confirmed that they had also commenced buying but it was still in small amounts while CCI office in Andhra Pradesh confirmed that they had purchased 50,000 bales of cotton till last week.

Fibre2fashion News Desk - India


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