Cotton Corporation of India (CCI) has begun procurement of the fibre crop at minimum support price (MSP) in the state of Telangana last week.

Lalit Kumar Gupta, Chairman cum managing director, CCI said, so far, about 600 bales of cotton has been purchased in Telangana at MSP. “We expect huge arrivals post Diwali and may have to step in across all major cotton producing states,” Gupta said adding that CCI is geared up for the procurement.

Presently, the cotton prices are hovering marginally above the MSP levels across various states and are likely to come under pressure when the arrivals peak in the days ahead. The prevailing firm trend in the cottonseed prices, witnessed on account of the recent increase in import duty on edible oils, is holding the cotton prices a tad over the MSP levels.

The Centre has declared an MSP of ₹7,121 per quintal for the medium staple and ₹7,521 per quintal for the 2024-25 cropping season, an increase of around 7 per cent over previous year.

Gupta said the CCI’s cotton procurement for the current 2024-25 marketing season may range between 50-70 lakh bales of 170 kg each, higher than the 33 lakh bales procured last year. CCI is currently having a stock of 15 lakh bales from the previous season.

With the recent spell of rains impacting the cotton in certain states, the quality of the current market arrivals has been a concern for trade and the millers. “We see a good demand for the old cotton” Gupta added.

The daily market arrivals have crossed 1 lakh bales of 170 kg each across the country and cumulative arrivals till Friday Oct 25 stood at 12.73 lakh bales in the current season as per the Cotton Association of India (CAI) data.

Recently, CAI has projected a 7 per cent decline in output this year at 302.25 lakh bales of 170 kg each on dip in acreages and adverse weather impacting the crop in some areas. Production in the previous season stood at 325.29 lakh bales.

Cotton acreages during kharif 2024 are down by 14 lakh hectares at 112.90 lakh ha as a section of farmers in key producing states of Gujarat, Maharashtra and Madhya Pradesh have shifted to other crops such as groundnut and pulses among others. The crop reduction is mainly witnessed in the North and Central Zones, where the output is supposed to decline by 9.62 lakh bales and 11.05 lakh bales respectively. In South zone, the crop size is seen lower by 1.85 lakh bales and CAI estimate a total reduction of 23.04 lakh bales over previous year’s 325.29 lakh bales.

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