Government buys 8 lakh bales of cotton this year; not to buy more

Industry news

Government buys 8 lakh bales of cotton this year; not to buy more

State-run Cotton Corporation of India (CCI) has purchased 8 lakh bales so far in the 2015-16 marketing year and decided not to buy more as domestic prices have firmed up slightly after demand from Pakistan.

Last year, CCI had procured 87 lakh bales of cotton. The cotton marketing year runs from October to September. "We have procured 8 lakh bales at the minimum support price (MSP) so far in 2015-16. No further procurement would take place as prices have started increasing," CCI Chairman and Managing Director B K Mishra told PTI.

The cotton has been purchased particularly from Andhra Pradesh, Telangana and some quantity from Maharasthra, he said. This year too, the government's cotton procurement was expected to be higher at last year's level due to sluggish demand from China. But increase in shipments to Pakistan as well as announcement of bonus, over and above MSP, to cotton growers in Gujarat have supported domestic prices to rise.

Mishra said the country has already exported 40 lakh bales of cotton so far this year, of which 20 lakh bales were shipped to Pakistan. The expected fall in the country's production due to a pest attack and drought for second straight year has also been supporting the prices, a trader said. The government's Cotton Advisory Board has pegged the country's total cotton production to decline to 352 lakh bales in 2015-16 from 380 lakh bales last year. India had exported 67 lakh bales in the entire 2014-15 marketing year.