Textile Ministry wants compensation for Cotton Corpn to release stock
‘CCI is a commercial entity, its objective is to support farmers, not industry’
“The Ministry is working on a Cabinet note seeking more funds as compensation for losses suffered by the CCI in off-loading stocks at prices lower than the procurement price (MSP) given to farmers,” a Textile Ministry official told Business Line.
The CCI may wait for domestic prices to strengthen further before it decides to sell. When the CCI does decide to off-load its stock in the market, it will only sell a portion of it at one time.
“The CCI is, at the end of the day, a commercial entity that does not want to suffer losses. Its objective is to support farmers through its minimum support price (MSP) operations when domestic prices fall and not (to support) the industry,” the official said.
The Union Budget did have a provision for reimbursing the CCI for the difference between the MSP it paid to farmers and the price at which it has been selling its stock in the market, but the amount has fallen short.
“We will soon forward the note seeking more reimbursement money to the Cabinet,” the official said.
Textile and yarn producers have been petitioning the Government for the release of over 20 lakh bales (170 kg each) of cotton held as stock by the CCI to check rising prices in the market.
The Government, however, does not see any need for intervention as it believes that the market is functioning in an orderly manner and cotton is easily available.
“The supply side position is comfortable. There is no disruption in the market. So, we are not going to come under any pressure and may wait for better prices,” the official said.
According to Government figures, about 34 lakh bales of cotton are coming to the market every month while the demand is only for 24 lakh bales.
Earlier this year, the Cotton Advisory Board had estimated production in the country at 334 lakh bales, consumption at 260 lakh bales and an exportable surplus at 70 lakh bales.
Textile producers’ body Texprocil has alleged that the Government has sold just 2-3 lakh bales in the last few months resulting in an artificial shortage of cotton supply and domestic prices have in turn risen.
On price rise
Prices of the most popular varieties of cotton have risen to about Rs 37,200 a candy (355 kg) compared to Rs 34,000 a candy in February this year.
The Textile Ministry is, however, not worried about the price rise in the domestic market as it says that it was in no way exorbitant. In fact, it wants to wait for the prices to rise.
“International prices have been going up because of China’s decision to buy cotton. It is normal for domestic prices, too, to increase. The price rise is in no way abnormal and we are not worried,” the official said.
Indian cotton arrivals dip on hopes of price rise
|March 21, 2013 (India)|
The all India kappas (seed cotton) arrivals till 15th March have crossed the 2.35 crore bales and the all India daily kappas arrivals have dropped to around one lakh bales per day as the farmers are bringing their stocked kappas in a restricted manner under the hope of receiving Rs.5000/- per quintal in states like Maharashtra, Andhra Pradesh and Gujarat.
PUNJAB, HARYANA AND RAJASTHAN:
Kappas arrivals have dropped to approximately 15000 bales per day in this region. Local Mills are actively buying cotton even though the prices have gone up by Rs.40 per maund in the last two days. The prices quoted for J-34 r/g in Punjab was Rs.4280/- per maund spot while in Haryana quotation for J-34 r/g was Rs.4200/- per maund spot and in Rajasthan J-34 r/g was quoted at Rs.4180/- per maund.spot Bengal Desi s/g was quoted at Rs.3800/- per maund spot .
Kappas arrivals everyday was approximately 35000 bales in Gujarat at present. Good buying was reported mainly from North Mills. Prices quoted for good quality S-6 cotton was Rs.39,200/-Spot per candy while average quality S-6 was sold at Rs.38,500/- Spot.per candy V-797 r/g was quoted at Rs.29,200/-Spot per candy .
Daily kappas arrivals were approximately 25000 bales. Good enquiry was reported from both North and South mills in this region. Prices quoted for good quality 30mm Bunny was Rs,39000/-Spot per candy while 29mm Mech-1 was quoted at Rs.38,600/-Spot per candy and low micronaire cotton was priced at Rs.37,500/-Spot per candy.
Kappas arrivals are dropping down quickly. Good quality Bunny was quoted at Rs.39,000/-Spot per candy and DCH-32 was quoted at 48,500/-Spot per candy. In M.P.top quality DCH.32 with 35mm S.L is getting depleted in Quantity and out of total crop estimation of about One lakh bales, about 5000 to 6000 bales of top quality is lying with Ginners and Traders. Major quantity, this year was exported to Bangladesh and Pakistan through Calcutta based Traders.
Arrivals are very poor and in centres like Adilabad good quality 29mm bunny wad quoted at Rs.39,500/ -Spot per candy while in Guntur 30mm Bunny was sold at Rs.40100/- Spot per candy and in centres like Warangal 29mm Bunny was transacted at Rs.39,600/-Spot per candy. At centres like Adoni 28mm cotton was sold at Rs.38500/-Spot per candy.
Quality is average and lot of variation in length is observed in most centres as Farmers are bringing 15% kappas of present arrivals mixed with their old stocked kappas which cannot be segregated. More of immature kappas has also started arriving since last month as the third pick of kappas was started.
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