Cotton farmers sell to the government
06/02/2009
The state-run Cotton Corporation of India has increased its procurement of local cotton enormously.
The government agreed a minimum support price (MSP) with farmers in September. This price now compares favourably with the price currently available on the open market. For this reason, cotton farmers have opted to sell 6.6 million bales of cotton—35.7% of the crop gathered so far during this financial year—to the CCI.
The CCI will attempt to sell the cotton it has bought to textile mills at home and overseas. The 6.6 million bales it has bought so far (the equivalent of 1.1 billion kilos) is 30 times the amount it bought in the whole of the previous financial year.
The organisation’s chairman and managing director, S.C. Grover, told Reuters: “It is our obligation to buy as much cotton as possible to protect the farmers. The demand for cotton was good in January and we were able to sell about 1 million bales to local mills at our price, but the prices have now fallen. We are getting into export deals, but the volumes are not there like last year. International buyers are looking for cheaper prices, and our prices are higher.”
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