India expects to sell 1.5 mn bales of cotton to Bangladesh to cut record closing stock: CCI CMD

State-owned Cotton Corporation of India (CCI) expects to sell 1-1.5 million bales of cotton to Bangladesh to liquidate surplus stocks, a top company official said on Wednesday. In an interview with PTI, Cotton Corporation of India Chairman Pradeep Kumar Agarwal said the exports would take place on a government-to-government basis and the shipments could start from next month onwards. He said India’s closing stock of cotton is likely to touch 9 million bales by the end of the current marketing year 2019-20 (October to September). One bale is equal to 170 kg.

“It is in G2G (government-to-government) agreement mode. Some quantity we have sold through tender but under G2G, it will take time because the MoU (memorandum of understanding) which is to be signed between both countries is in the vetting stage,” Agarwal told PTI over phone.

Asked if the sale can take place by September before the new crop arrives, he said, “I think so”. Agarwal said he expects 1-1.5 million bales of cotton to be sold under the proposed agreement with Bangladesh. He said India is likely to have a record surplus closing stockpile of 9 million bales of cotton by September-end, adding that the State Trading Corporation of Bangladesh will subsequently sell the cotton to the country’s mills.

Talking about his company, Agarwal said CCI’s total procurement this year was 105 lakh bales, plus 9 lakh bales from 2018-19, which put the total stock at 114 bales, out of which, some stock has been sold. “By September-end, I am expecting it (CCI’s net stock) may be around 3 million bales,” he said.

Agarwal said India’s total production estimate as per the Cotton Advisory Board was 360 lakh bales. However, Cotton Corporation of India estimates the country’s overall production at around 350 lakh bales, he said. Asked about the price at which cotton will be sold under the agreement, Agarwal said it will not be less than the domestic price in India and depends on the variety of cotton they are likely to purchase, adding that the minimum rate is Rs 35,000 a candy.

“(By September), some quantity will go out. It will continue, but after the agreement, we have to watch the progress, what is their demand, what is the price coming, everything has to be watched,” he said. Agarwal said the price of sale will depend upon various factors, including the variety, quantity and quality parameters of the cotton as the price differs with its quality attributes and is not uniform.

He shared that CCI paid Rs 5,500 per quintal to farmers for buying the raw kapas (cotton), at the minimum support price which is more than the market rate. Cotton Corporation of India procures cotton from farmers at the minimum support price and sells it to mills.