The CCI started the procurement operation at the support price from October 2014 to protect farmers from sharp decline in domestic prices in view of expected higher production.

"Cotton procurement has reached 41 lakh bales of 170 kg each so far this year. Maximum procurement was from Andhra Pradesh and Telangana, followed by Maharasthra," a senior Textile Ministry official said.

About 27 lakh bales of cotton have been purchased from Andhra Pradesh and Telangana, 7,00,000 bales from Maharashtra, 2,20,000 bales from Gujarat and around 2,00,000 bales from Punjab, Haryana and Rajasthan, the official added.

Cotton prices in domestic market are ruling below support price of Rs 4,050 per quintal for last few months.

The sluggish trend is expected to continue due to poor export demand, especially from China, amid higher local production.

In global markets, cotton prices have fallen substantially since last spring (March-May), when they were above 90 cents per pound to under 70 cents per pound in December, according to the US-based International Cotton Advisory Committee (ICAC).

"The contraction in China's demand for cotton yarn imports is expected to cause India's cotton consumption growth to slow to 4 per cent, reaching 5.3 million tonnes (24.34 million bales).

"This is down from 5 per cent in 2013-14 and 14 per cent in 2012-13 when demand for Indian yarn exports was much stronger," ICAC said in its latest report.

As per ICAC estimates, India's production is expected to remain stable at 6.8 million tonnes (31.23 million bales) due to less favourable monsoon weather despite an expansion in the cotton area by 5 per cent to 12.3 million hectares.

"However, its production will surpass China’s by over 3,00,000 tonnes (1.37 million bales), making it the largest cotton producer in 2014-15," ICAC said.

Meanwhile, the government' Cotton Advisory Board has pegged the country's total cotton production at over 40 million bales in 2014-15 marketing year as against 39.8 million bales in 2013-14.

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