Cotton Corp of India (CCI) purchases only good quality cotton directly from farmers and avoids intermediaries.The price gap between cotton sold by the Cotton Corp of India and that prevailing in the market has widened significantly in the last few days after global prices fell by a steep 15 per cent.

The fall in local prices that followed was not as steep as that of the global market, mainly due to the extremely tight supply. This was because output in the current year was at a decade-low due to droughts in key producing states of India. The agency would rather hold stocks instead of cutting prices and incurring losses. Cotton lying with Cotton Corp is of premium quality than the variety benchmarked to Cotlook.

Bangladesh meets over 60 per cent of its cotton requirements from India and figures in the world’s top two exporters in various textile products. The country has been the top destination for Indian cotton over last few years. India’s cotton yarn exports have fallen by more than 50 per cent in August 2019 and down over 35 per cent in April to August. India’s exports are down due to bilateral trade pacts and because of competitors such as Vietnam, South Korea and Bangladesh getting preferential access in the global markets.