The Cotton Corporation of India (CCI) from Tuesday started selling its stock to bulk buyers at discounted rates of up to Rs 5,000 per candy in a move to help the industry get raw material at cheaper prices.
State-run CCI in an order said the discount is being offered on a purchase up to 15,000 bales of cotton to MSME spinning mills, KVIC (Khadi and Village Industries Commission) units and cooperative spinning mills.
Industry players said that discounted rates will give much-needed boost to the already raw cotton starved Indian industry which has been reeling under severe pressure due to the high raw cotton prices.
The CCI is selling cotton pertaining to crop year 2018-19. The discount scheme will be application from March 3 till April 30 this year, the order said.
The CCI is offering a minimum discount of Rs 3,200 per candy for the purchase of 100 bales per day and maximum discount of Rs 5,000 per candy for the purchase of over 4,500 bales per day especially to MSME spinning mills, KVIC units and cooperative spinning mills.
However, for other bulk buyers, the minimum discount has been fixed at Rs 3,200 per candy for a purchase of 500 bales per day, while maximum discount of Rs 5,000 per candy for purchasing more than 1 lakh bales per day, the order said.
The discount scheme is applicable on CCI processed stock and is in supersession of bulk incentive scheme for stock of 2018-19 season, the order added.
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Commenting on the development, Confederation of Indian Textile Industry (CITI) Chairman T Rajkumar said sale of cotton at a discounted rate will give a much-needed boost to the already raw cotton starved Indian industry which has been reeling under severe pressure due to the high raw cotton prices and declining export of cotton yarn.
He also said the move will really give an impetus to the industry to regain and increase its share of exports in international trade.
The industry body said export of cotton yarn in the current fiscal declined by more than 30 per cent due to which there was a very limited demand of raw cotton which discouraged not only the cotton spinners but also CCI, which could not sell the cotton procured in the 2018-19 season to the tune of 9 lakh bales on drop in cotton prices.
This year, the CCI has already procured over 60 lakh bales of cotton at a minimum support price, the cost of which is much higher than the market price.
Hence, the CCI has been quoting higher prices than the market price and practically there was no off-take of cotton from the already cash-starved cotton yarn industry due to the low demand in domestic as well as global market, Rajkumar added.