Cotton prices have increased above the minimum support price (MSP) in recent days. Due to which, the government may not allow Nafed, an agri-cooperative major to give discounts to consumers for bulk cotton purchases. The cabinet would be discussing the agriculture ministry's proposal of allowing Nafed to sell cotton at discounted prices, very soon, just as was done in the case of Cotton Corporation of India (CCI).
Experts say that in case the government approves the proposal, it would have to provide a subsidy of Rs. 1,300 crore to Nafed. This year Nafed has purchased 36 lakh bales that means 18 lakh tones of cotton worth Rs. 5,139.33 crore under the market intervention scheme (MIS).
In the month of February, the market rates of cotton were ruling below the benchmark support prices. The cabinet had directed CCI to dispose of the cotton procured at MSP by selling it on discounted rates to bulk purchasers. But now according to experts, as the cotton prices have increased above MSP in recent days, CCI may not sell its stocks at discounted rates.
Prices of cotton in Gujarat and in a few other regions are currently ruling above MSP. Nafed has purchased 16.7 lakh tones of cotton worth Rs. 4,766.03 crore from Maharashtra, which is the maximum amount purchased from any state. It has purchased 58,581 tons of cotton worth Rs. 166.95 crore from Gujarat and 70,623 tons from Andhra Pradesh totaling to Rs 206.34 crore.
Fibre2fashion News Desk - India
marketing@alchempro.com
