The Cotton Corporation of India (CCI) has begun its cotton procurement operations in Telangana, purchasing around 600 bales at the Minimum Support Price (MSP) so far. This was confirmed by Lalit Kumar Gupta, the Chairman-cum-Managing Director of CCI.
With the anticipation of significant cotton arrivals post-Diwali, CCI is prepared to intervene in major cotton-producing states across the country. The current market prices for cotton are marginally above the MSP levels, but they are expected to face pressure as arrivals peak. The recent increase in import duty on edible oils has boosted cottonseed prices, indirectly supporting cotton prices and keeping them above the MSP.
The Centre has declared an MSP of ₹7,121 per quintal for medium-staple cotton and ₹7,521 per quintal for the longer variety for the 2024-25 cropping season, reflecting a 7% increase over the previous year. CCI estimates its cotton procurement for the current marketing season to range between 50-70 lakh bales, significantly higher than the 33 lakh bales procured last year. The corporation currently holds a stock of 15 lakh bales from the previous season.
Quality Concerns Amidst Adverse Weather
Recent rainfall has affected cotton crops in certain states, raising concerns about the quality of market arrivals. While old cotton is in high demand, the daily market arrivals have surpassed 1 lakh bales, with cumulative arrivals reaching 12.73 lakh bales in the current season.
The Cotton Association of India (CAI) has projected a 7% decline in cotton production this year to 302.25 lakh bales due to reduced acreage and adverse weather conditions in some regions. Cotton acreage during Kharif 2024 has decreased by 14 lakh hectares to 112.90 lakh hectares, with farmers in key producing states shifting to alternative crops like groundnut and pulses. The decline in production is primarily observed in the North and Central zones.
