The Cotton Association of India expects India to pile up huge inventory of cotton just like China, if the Cotton Corporation of India (CCI) does not take measures to offload its stock swiftly.

Maintaining the cotton output at the last estimated level of 38.27 million bales (a bale is 170 kg), Dhiren N Sheth, President, CAI, said the Corporation had procured about 8.7 million bales from farmers as part of the Government’s minimum support price commitment.

Unfortunately, he said, looking at the pace at which CCI is selling the cotton, it is expected that it would be left with a sizeable quantity of cotton by the end of the season (in September).

This does not augur well for the country with apprehension of a major support price operation looming large at the start of next cotton season, he added. India’s cotton inventory is expected to surge 25 per cent to 7.39 million bales by October from 5.89 million a year earlier. The faulty policy of China led to it holding huge cotton stockpile equivalent to its two year consumption. Though China has stopped procuring cotton from farmers and switched to distributing direct subsidy to farmers from this year, Sheth said it is still sitting on a huge stockpile which it finds hard to dispose.

“India needs to learn a lesson from China’s mistake and dispose of the cotton lying with CCI quickly, to avoid getting into a China-like situation,” he said.

According to the latest Government data, the acreage under cotton is marginally lower at 9.9 million hectares against 10.05 million hectares in 2013-14 as farmers shifted to other remunerative crops due to low prices of the fibre.

Though the demand for cotton has improved marginally, the prices are almost flat with occasional spurts. Going by trends in commodity futures markets, analysts expect cotton prices to range between ₹4,200 and ₹4,400 a quintal in the coming season. This is slightly higher than the minimum support price of ₹4,050 fixed by the Government.

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