By admin       2019-02-13

MUMBAI – Cotton procurement by the state-owned Cotton Corp of India in the ongoing 2018-19 (Oct-Sep) season has crossed 700,000 bales (1 bale = 170 kg), as prices remained below the minimum support prices due to tepid exports and weak global prices.The procurement figure is significantly higher from 280,000 bales that the agency had procured by early January."We have already crossed 700,000 bales mark and 80-85% of this comes from Telangana," a senior Cotton Corp official told Cogencis.Of the total quantity, 70,000 bales have been procured in Maharashtra. "Another 35,000-40,000 bales have been bought in Madhya Pradesh," the official said.Cotton was also procured in small quantity in Andhra Pradesh, Karnataka, and Odisha.Cotton prices have been on a fall in the global market. On the Intercontinental Exchange, the price hit a 15-month low on Monday, while on the Multi Commodity Exchange of India, prices are currently ruling at 10-month lows.In Indian spot market, however, prices are relatively resilient due to high MSP.Spot prices are higher than the global price as farmers in Maharashtra and Gujarat, the top two producers of cotton, have been holding on to their crop expecting a realisation of around 6,000 rupees per 100 kg as Indian and world supply outlook remains grim for the year due to lower output.The minimum support price for medium-staple variety of cotton is at 5,150 rupees per 100 kg, and that for long staple at 5,450 rupees per 100 kg which are roughly equivalent to 43,000-43,500 rupees per candy (1 candy = 356 kg). The government had raised the MSP for cotton by 26% this year.In spot markets of Gujarat, the Shankar-6 variety was sold for 41,500-42,800 rupees per candy (1 candy = 355.62 kg). In Maharashtra, the 29-30 mm variety was sold for 41,500-42,500 rupees per candy.At 70,000 bales, the procurement of Cotton Corp was just around 1% of the total crop in Maharashtra. Output in the state is estimated at around 7 mln bales, lower than 8.5-9.0 mln bales projected during the sowing period."Despite, prices at the minimum support level, procurement in the state is still slow mainly due to hoarding of the superior quality stocks by farmers, demanding higher rates," said Jayesh Mahajan, general manager, procurement at Maharashtra State Coop Cotton Growers Marketing Federation.If the global and domestic situation persists for another month or two, the procurement by Cotton Corp may touch 1.5 mln bales in April, the official said. End

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