Cotton processors and traders have criticized the Cotton Corporation of India (CCI) for higher cotton prices for this season. CCI is a government agency that deals with the purchase of cotton at minimum support price, fixed by the government. The processors are worried about the high price of Rs 2,850 a quintal and low profit due to competition and contractual processing of cotton.
The MP Cotton Processors and Traders Association President Kailash Agrawal said that the cotton procurement agency is paying Rs 2,850 in Madhya Pradesh as MSP. It is supplying it for Rs 22,000-23,000 per candy to yarn manufacturers. Prices have already dropped in US due to global financial crisis.
They are suffering a net loss of 10 percent by purchasing at MSP fixed by the government. Thus, the processors are left with no options but to close processing units in the state. About 200 units have been temporarily closed in Madhya Pradesh following high MSP. He demanded the roll back of MSP hike and asked for Rs 300 bonus directly to the framers. Agrawal said that he is aware of the problems of farmer community but wants to survive in tough times.
However, CCI branch manager said that it has purchased only 15 per cent of the total cotton from the market and rest is purchased by the processors. The agency procured only 26,000 bales of the total 1.75 lakh bales arrived in the market. He blamed the prevailing market conditions as main problem for ginning and processing mill in the state.
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