Amid a rise in minimum support price (MSP), state-owned Cotton Corporation of India (CCI) has projected a bumper purchase of cotton at 6-7 lakh bales (One bale is equal to 170 kg) from Gujarat in 2008-09, compared with 1.25 lakh bales bought in a year-ago period, official sources said.
MSP for Shanker-6 variety is fixed at Rs 2,850 per quintal. “The purchases across Gujarat by CCI could go up to 6-7 lakh bales,” a senior CCI official said.
The estimation on purchase has been done in the backdrop of reports on rise in cotton imports in July, post abolition of 14 per cent import duty on it, he said.
However, the total cotton procurement in the country is likely to be at 5-10 million bales.
The official said the corporation plans to begin purchases from its 18 centres, spread across Ahmedabad from next week. CCI has 57 centres in 17 districts.
The corporation had purchased around 1.25 lakhs bales last year, as cotton prices in the open market were ruling above the MSP of Rs 2,055, he said.
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Meanwhile on cotton arrivals in the market, a cotton broker Neerav Dalal said: “Over 15,000 bales of cotton has begun to hit the market now. The exporters are expected to show interest once the prices of cotton candy touches Rs 23,500.”
He said, “The current prices of candy is around Rs 25,000.” One candy is equal to around 2.1 bales.
Noting on the export of cotton from the state, the CCI official said, “CCI expects cotton exports from Gujarat may decline this year since the duty drawback of 1 per cent was withdrawn by the government, and import was made more liberal.”
CCI at the onset of cotton arrival in the state predicted a record produce of 120 lakhs bales this year, and estimated its commercially viable purchases to remain below the MSP.
The corporation is a marketing organisation for the local cotton industry, which is responsible for equitable distribution of fibre among the industry and serves as a vehicle for the canalisation of cotton imports.