Govt's cotton buying may hit record on high MSP

Cotton procurement is likely to hit a record this year with state-owned Cotton Corporation of India (CCI) eyeing a bumper purchase of 5-10 million bales due to a sharp hike in the minimum support price (MSP).

“We expect a minimum 5 million bales (one bale=170 kg) of procurement in the 2008-09 season, and could even go up to 10 million bales. The cotton purchase last season stood at 2.75 million bales,” CCI Chairman and Managing Director Subhash Grover said.

Cotton output is expected to rise to at least 32 million bales in 2008-09 from 31.5 million bales last year, he said.

CCI, the nodal agency for cotton procurement, is set to start purchasing in the next 3-4 days from Punjab, Haryana and Rajasthan. Procurement from the central zone — Madhya Pradesh, Maharashtra and Gujarat — is likely to commence from the third week of October while buying from the southern region of Andhra Pradesh, Karnataka is expected to begin from November, he added. The cotton season runs from October to September.

Grover attributed the large-scale procurement by the CCI to the substantial hike in cotton MSP, which could prompt traders to scout for alternative avenues for buying.