The Ministry of Textiles is monitoring, on a daily basis, the arrivals
of cotton and the price situation across major mandis. Currently
cotton prices are stable, averaging around Rs. 4,000 per quintal, way
above the MSP prices fixed at 3,100 per quintal, eliminating the need
for MSP operations. However, in order to secure the raw material
supply lines for the domestic requirements of the textile sector,
commercial operations by the Cotton Corporation of India (CCI) have
become imperative.
CCI has been directed to intervene in the market for commercial
operations to build up reserves of 25 lakh bales till the cotton
arrivals in the new cotton season of 2012-13. This has been
necessitated by the fact that the textile industry, impacted by a
slowdown, is unable to carry stocks beyond 15 days, whereas the
mandatory carryover stock requirement is 60 lakh bales at 85 per cent
efficiency. CCI is expected to purchase at the prevailing market price
approximately 10 lakh bales each in the next two months.
This considered decision has been taken to ensure price stability in
the market as also availability of cotton for the domestic user
industry, keeping in mind the varied interests of stakeholders across
the entire cotton value chain, ranging from farmers, ginners, millers
and traders.
On a particular day recently, CCI purchased approximately 11,000 bales
at Rs. 4,400 per quintal from major mandis across Gujarat.