Cotton Corporation of India sold about 700,000 bales of cotton recently its highest single day sale in five years, as it offered discounts on bulk orders.
The state-owned company procured 10.4 million bales of cotton – each bale weighing 170 kilograms – amounting to one-third of India's cotton production in 2019-20. It has so far liquidated only about 7.4% of it as it resisted distress sale as expected by traders and millers.
Now, as it stares at yet another bumper procurement operation during next cotton season beginning October 1, CCI has offered a discount of Rs 1,500 per candy for purchase of more than 200,000 bales of cotton. Buyers get a ‘free period’ of 90 days, which means they have to lift at least 50% of the cotton purchased within the first 45 days while they get another 45 days to lift the balance.
Between October 2019 to June 2020, CCI could sell only 200,000 bales of cotton as it had refused to sell at a loss, as expected by traders and millers. Based on the minimum support price (MSP), the cost of cotton procured by CCI is about Rs 45,000 per candy of 356 kg each, while the ruling market price is about Rs 35,000/candy.
Besides its huge procurement in the 2019-20 cotton season, when its agent Maharashtra State Cotton Growers' Marketing Federation alone procured 1.7 million bales of cotton from farmers, CCI is also carrying 900,000 bales of cotton of the 2018-19 season, which is prices lesser than the new cotton by about Rs 1,000 per candy of 356 kg each.