The Cotton Corporation of India (CCI) could be necessary to procure minimal quantity of cotton in the 2021-22 season, as kapas costs are most likely to rule above the minimum assistance costs (MSP) for a greater aspect of the season. Procurement could be necessary for the duration of the peak season when costs drop beneath the MSP, top rated officials of the corporation stated.
As against 92 lakh bales that was procured in the 2020-21 season, the CCI could not be necessary to procure more than 30 lakh bales for the new season, Pradeep Kumar Agarwal, CMD of the CCI, told FE. Strong demand for cotton and depleting stocks, in addition to 10% import duty levied on cotton, have triggered costs to rise to Rs 6,500-7,000/quintal at the commence of the season.
Although the region beneath coverage has gone down by 6-8%, from 133 lakh hectares last year to 125 lakh hectares in the present season, cotton production will nevertheless be higher simply because of superior rains and could touch 350-360 lakh bales. As per CCPC information, the 2020-21 season started with an opening stock of 120 lakh bales and the crop size was 371 lakh bales with 11 lakh bales of imports, top to a total provide of 502 lakh bales. The new season could commence with an opening stock of 60-70 lakh bales.
“CCI will be present in the market to ensure that the farmer does not sell in distress. Intervention may be required only during the peak season in December when arrivals are high and prices may fall below MSP. The CCI may then be required to intervene for a short period of 15-20 days, especially in far flung rural areas where there are no buyers,” Agarwal stated.
The procurement could not go above 30 lakh bales. Meanwhile, cotton arrivals have begun in the north in a modest way, with 800-2,000 bales getting brought to the industry on a every day basis and these are not meeting the high-quality parameters of the corporation, the CCI chief stated. “Significantly, this season along with kapas prices, cotton seed prices are also ruling high and promise good returns to farmers. Seed prices have gone up to Rs 4,500-5,000 per quintal as against Rs 2,500 a year ago,” he stated.
Meanwhile, the US Department of Agriculture has forecast India’s cotton production at 29 million bales (480-pound), which is unchanged from last month and up by 2% from last year. Area harvested is forecast at 12.9 million hectares, down marginally from last month and last year due to the slow progress or pause in the southwest monsoon and competitors with other crops.
According to the India Department of Agriculture’s all India crop scenario report dated August 6, planting progress in the central area, which comprises 75% of total production, is down practically 5% from the exact same period last year. Northern India completed sowing cotton in May. Planting in central India should really be completed in August. Planting activities have began in the southern area.