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India: CCI forced to wait for procurement as cotton prices rise above MSP

Cotton Corporation of India (CCI), which was gearing up for procurement operations from farmers may have to wait for a while as prices have gone above the Minimum Support Prices (MSP). Cotton prices are ruling at Rs 5,800 per quintal and have jumped up by nearly Rs 800 per quintal in last 10-12 days. The prices have shot up by nearly Rs 800 per quintal on reports of short supplies, the typhoon in the US that has hit the crop and China announcing a quota of nearly 48 lakh bales.

P Alli Rani, CMD, CCI pointed out that arrivals are weak, by about 50,000 to 60,000 bales a day. Moreover most of the cotton does not meet the FAQ parameters with more than 12 per cent moisture. Meanwhile, experts says traders are buying cotton at Rs 50 or Rs 100 more than MSP and once arrivals peak, prices are set to drop and then it will be difficult for them to buy at MSP.

Market sources pointed out that prices are up due to buying by mills, which are running out of stock amid lower-than-expected supply of the new crop in Maharashtra, Gujarat and Telangana.