Responding to the demand made by country’s textile industry, the Cotton Corporation of India (CCI) has decided to release more cotton into the domestic market and put its plan to float a global tender for sale of cotton on the back burner. According to CCI CMD BK Mishra, the government agency has decided not to go ahead with the plans for global tender for cotton sale since the domestic market is picking up. CCI has been placing 50,000 bales on a daily basis for the past 10 days on board for e-auction and around 80-90% of this has been picked up by mills, he said.
CCI has decided to increase the quantity of cotton for sale on board to 75,000 bales a day. On Monday, of 75,000 bales placed for auction, buyers picked up around 61,000 bales. CCI has so far sold around 7 lakh bales in the domestic market.
According to Mishra, global tender is likely to result in panic in the domestic market and could send out a wrong message. He had earlier said that CCI does not intend to offload huge stocks immediately, as it could worsen an already glut-like situation in the market and hurt realisations of farmers selling cotton. The agency is holding stocks worth around Rs 16,000 crores now and has procured around 86.09 lakh bales. The agency has stopped procurement of cotton from farmers for the current season on account of prices moving up. Cotton prices have increased marginally by Rs 50-100 per bale resulting in market prices of Rs 4,100-4,150 per bale both in Gujarat and the South.
The textile industry has been urging CCI to start releasing cotton into the market, to ease supply stating that the industry is passing through a serious situation due to non-availability of cotton in abundant quantity, on account of the stop-go policy of CCI, in spite of holding a high level of stock.
Southern India Mills’ Association has also urged the Union textiles minister Santosh Gangwar to direct CCI to immediately commence selling the commodity directly to the actual users by e-auction, with liberal credit norms.
