The Hindu Business Line : Cotton Corpn told to buy more to check price fall

THE Centre has directed the Cotton Corporation of India Ltd (CCI) to undertake unlimited procurement of cotton to prevent market prices from plunging below the official Minimum Support Prices (MSP) declared for 2004-05.

The decision follows a meeting here on Wednesday between the Union Agriculture Minister, Mr Sharad Pawar, and the Textile Minister, Mr Shankarsinh Vaghela, which was also attended by the Textile Commissioner and the CCI Chairman. "CCI will tomorrow be placing an advertisement announcing its price support operations and within a week's time, we expect it to start purchases to prevent prices from going below the MSP," Mr Pawar told presspersons here today.

Mr Vaghela said that while there were also other options available, such as raising the import duty on cotton from the existing 10 per cent or enhancing the subsidy on exports, "we will not consider them right now".

For 2004-05, the MSP of cotton (kappas) has been pegged at Rs 1,760 per quintal for J-34/H-777/F-414 varieties (against Rs 1,725 during 2003-04) and Rs 1,960 per quintal for the H-4 variety (Rs 1,925 in 2003-04).

CCI, which earned a profit after tax of Rs 10.74 crore on a total income of Rs 1,049.49 crore during 2003-04, is the Centre's designated agency to undertake price support operations, whenever the price of kapas (seed cotton) touches the MSP. During 2003-04, CCI purchased about 10 lakh bales, out of the country's total production of 177.50 lakh bales (one bale equals 170 kg). On the other hand, the quantities procured as part of price support operations has never exceeded 10,000 bales during recent years.

But with production this year expected to hit a record 211 lakh- 213 lakh bales, there is a downward pressure on prices, necessitating CCI's intervention. CCI currently operates in all cotton-growing States of the country, barring Maharashtra, where, till last year, the State Government was purchasing all the cotton under the Monopoly Procurement Scheme.

"Since this scheme has been discontinued, we have asked CCI to set up purchase centres in Maharashtra as well," Mr Pawar said.

He expressed optimism that the country would be able to export 15 lakh bales this year, against last year's 9 lakh bales, on account of increased demand from China.

More Stories on : Agricultural Policy | Cotton

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Kingfisher Airlines' launch put off to April 2005

Aviation FDI cap hiked to 49 pc — Foreign airlines stay barred from holding stake

IA to get Rs 138 cr to clear dues

Fine with us, says Left

Satyam beats own guidance on revenue; Q2 net up 28%

Bajaj Auto net profit dips in Q2 at Rs 180 cr

Govt plans to appoint advisor for phase II of FM privatisation

Cotton Corpn told to buy more to check price fall

Sustained selling pressure drives Sensex down

Oriental Bank yet to get a hang of GTB salary maze

RBI to reveal penalties against banks