Thursday, March 4, 2021

Kapas costs cross govt-declared MSP, CCI stops procurement in over 300 centres

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JUST FOUR months after Cotton Corporation of India (CCI) began procurement in all its 400 centres throughout the nation, the operations have stopped in over 300 centres as kapas (uncooked unginned seed cotton) costs in most mandis in main cotton producing states have crossed the government-declared minimal assist value (MSP) of Rs 5,825 per quintal.

The government-owned company needed to wade in at the start of the cotton advertising and marketing season (October to September) 2020-21 to start procurement. PK Agarwal, chairman-cum-managing director of CCI, mentioned, to this point, that they had affected procurement of 87.96 lakh bales (one bale having 170 kg pressed ginned lint) of cotton from 18.02 lakh farmers.

“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,” he mentioned.

While world forces like a drought in USA — the most important cotton producer on the earth — and bullish procurement by China despatched cotton costs rallying, the presence and surety of CCI’s procurement centres have helped Indian growers, particularly at the start of the season. Pradeep Jain, founder president of Khandesh Gin/Press Owners and Traders Association, mentioned even with the Covid-19 pandemic, farmers benefited from CCI’s presence.

“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 mentioned. His organisation largely offers with cotton growers in North Maharashtra. Jain and different merchants mentioned the CCI’s procurement was instrumental in guaranteeing that farmers, whose produce met truthful and common high quality (FAQ) parameters, had been capable of realise the MSP that merchants wouldn’t have been capable of afford given the supply-demand state of affairs again then.

For kapas growers, over the previous 60 years, CCI has turn into the go-to level for promoting high quality produce at government-notified MSP. This is especially essential in years when oversupply ensuing from a bumper crop led to a value dip under MSP. Procurement by CCI supplies much-needed assist, particularly in such occasions.

While procurement centres stay all through the cotton advertising and marketing season, operations cease as soon as costs cross the MSP. Thus, for 2019-20 season, when kapas costs remained low almost all through the season, CCI ended up procuring a report 105.23 lakh bales of cotton (almost one-third of the cotton produced), whereas for the 2018-91 season, when costs had been unusually excessive for many of the season, simply 11.03 lakh bales had been procured.

Like different authorities businesses, CCI procures through agricultural advertising and marketing produce committees (APMC). Farmers who wish to promote their produce to the company should register with the APMCs, with paperwork like land extract, financial institution particulars and Aadhaar card. Once the mandi verifies credentials of the farmer, the kapas is transported to the CCI’s procurement centre, which is generally the yard of the closest gin/press unit. After high quality checks when it comes to moisture and presence of exterior materials, the worth of the produce is set. If the farmer agrees to the worth, the sale slip is drawn up and cost is credited to the farmer’s checking account inside the subsequent two to 3 days.

Once uncooked kapas is processed, cotton seeds and lint are separated with the lint being pressed into bales of 170 kg every. Both the seed and bales are individually auctioned off by CCI, as these are its major sources of income.

While the company is remitted to obtain at MSP, whereas promoting it usually sells under the procured value thereby incurring a loss. The central authorities compensates the company for this, however CCI has reported successive earnings within the final three years the due to the earnings generated from the properties it offers on lease, comparable to warehouses.

In the final three years, CCI has acquired a complete of Rs 2050.33 crore as compensation, whereas it has helped farmers obtain a complete MSP of Rs 34,800 crore. Senior officers mentioned final season, they procured almost one-third of the cotton produced within the nation.

“Had it not been for the corporation, prices would have gone south. Even if we buy just one-third of the cotton produce, the ripple effect is enough to reach all kapas growers in the country,” they mentioned.

Traders like Jain mentioned in view of strict adherence to high quality, CCI attracts the perfect produce out there out there. This forces merchants to boost their costs in response, they added.

Market traits present a transparent Rs 200 to Rs 300 per quintal restoration in mandi costs as soon as CCI goes into motion. Also throughout off season, CCI ensures availability of high quality cotton thereby negating hoarding by merchants.

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