According to the announcement issued by the Indian Cabinet Committee on Economic Affairs in June, the minimum support price of Indian cotton in the 2022/23 season increased to 6,080 rupees/quintal; the MSP of medium fiber varieties increased from 5,726 rupees/quintal to 6,080 rupees/quintal; long-term cotton MSP increased to 6,080 rupees/quintal; The MSP of fiber varieties has increased from Rs 6,025/quintal to Rs 6,380/quintal.
Since mid-to-late September, seed cotton has been picked and put on the market in cotton areas such as Punjab and Rajasthan in northern India. The price of cotton delivered in October also fell to 6500-6550 rupees/kand, although it has dropped from the price in early September. 20-24%, but it is still significantly higher than the MSP minimum purchase price and is still at a relatively high level in recent years. According to feedback from international cotton merchants and Indian yarn mills, on November 4, the domestic price of S-6 cotton in India was about 65,000 rupees/kander; the average spot price of 29mm length cotton was 64,300 rupees/kander, and the absolute price still ranks first in the world.
Recently, there has been a lot of news that CCI will start purchasing and stockpiling in 2022/23. However, the author believes that the following factors will make it difficult or even difficult for CCI to start purchasing and stockpiling:
First, although the MSP minimum purchase price has been increased this year, it is still significantly lower than the current market price. Farmers and cooperatives have very little interest in selling to CCI. Private cotton processing companies are still the main body of seed cotton purchase and processing, and CCI is obviously in competition. downwind.
Second, the moisture standard for CCI purchase is still 8-12%, which will become a “stumbling block” for farmers to sell. Due to the long-term rainfall in the central cotton states of Gujarat, Maratha and southern cotton-producing areas in September/October 2022, the moisture content of seed cotton was significantly higher than in previous years, generally reaching 12%-20% or even higher. Less than CCI collection and storage standards.
Third, compared with CCI purchase and storage, private cotton processing companies not only have relaxed purchase standards, but also have more timely, efficient, and flexible loan settlements. In some areas, Indian cotton farmers have alleviated pressure by borrowing from cotton companies first and then selling seed cotton as deductions. , and CCI obviously can’t do it. Of course, due to the delay in the launch of seed cotton in the central and southern cotton regions of India in 2022/23, and farmers picking more and more slowly due to the decline in cotton prices, not only the cotton sales and processing period are passively extended, but also the fluctuation range is relatively large. Not conducive to CCI purchasing and storage.
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