After Cotton Corporation of India (CCI) began procurement in all of its 400 centres around the nation, the operation have stopped in over 300 centres as prices of Kapas (uncooked unginned seed cotton)  in maximum mandis in primary cotton generating states have crossed the government-declared Minimum Support Price (MSP) of Rs 5,825 per quintal.

The government-owned corporation had to wade in at the beginning of the cotton marketing season (October to September) 2020-21 to begin procurement. PK Agarwal, CMD of CCI, said, that to date, they had affected procurement of 87.96 lakh bales (one bale having 170 kg pressed ginned lint) of cotton from 18.02 lakh farmers.

Agarwal said, “As of January 25, farmers have received Rs 25,691.35 crore in way of MSP. Our centres will remain open but as average traded prices of kapas in most mandis have crossed MSP, there is no need for us to procure.”

While global forces like a drought in USA, the largest cotton producer in the world, and bullish procurement by China sent cotton prices rallying, the presence and surety of CCI’s procurement centres have helped Indian growers, especially at the beginning of the season. Pradeep Jain, founder president of Khandesh Gin/Press Owners and Traders Association, said that even with the Covid-19 pandemic, farmers benefited from CCI’s presence.

Jain also added, “Back in October 2020, when farmers started bringing their kapas to the market, average traded price was in the range of Rs 4,500 to Rs 4,600 per quintal. Prices started rallying only after CCI started procuring.”  Jain’s organization largely deals with cotton growers in North Maharashtra. He and other traders said that the CCI’s procurement was instrumental in ensuring that farmers, whose produce met fair and average quality (FAQ) parameters, were able to realize the MSP that traders would not have been able to afford given the supply-demand situation back then.

For Kapas growers, over the past 60 years, CCI has become the go-to point for selling quality produce at government-notified MSP. This is particularly important in years when oversupply resulting from a bumper crop has led to a price-dip below MSP. Procurement by CCI provides much-needed support, especially in such times.

While procurement centres remain open throughout the cotton marketing season, operations stop once prices cross the MSP. Thus, for 2019-20 season, when kapas prices remained low almost throughout the season, CCI ended up procuring a record 105.23 lakh bales of cotton (almost one-third of the cotton produced), while for the 2018-19 season, when prices were unusually high for most of the season, just 11.03 lakh bales were procured.