Estimates of India's cotton production have been kept unchanged at 382.75 lakh bales for the 2014-15 marketing year ending September. Production stood at 40 million bales during 2013-14. The Cotton Corporation of India (CCI) has procured about 8.7 million bales to provide price support to farmers but has not been able to sell the stocks.

The pace at which the commodity is being disposed, a sizable quantity is likely to remain unsold at the end of the season. This augurs badly for the country and apprehensions of a major support price operation at the beginning of the next cotton season are looming large.

China is holding stock equivalent to its consumption of about two years and is finding difficulty in liquidating it. India needs to learn a lesson from the mistakes China made and dispose off the cotton lying with CCI quickly, to avoid getting into a China-like situation.

The projected balance sheet drawn by the CAI for 2014-15, estimates total cotton supply at 453.65 lakh bales while domestic consumption is estimated at 31.5 million bales. CCI started procurement operations at the support price from October 2014 to protect farmers from the sharp decline in domestic prices in view of expected higher production.