Mumbai: The government has decided to build cotton reserves of 2.5 million bales of 170 kg each to meet the needs of the domestic textile industry, a government statement said on Wednesday.

State-run Cotton Corporation of India (CCI) has been directed to intervene in the market to ensure stability of prices, the statement said.

“This has been necessitated by the fact that the textile industry impacted by a slowdown is unable to carry stocks beyond 15 days,” the statement said.
CCI is expected to purchase about 1 million bales per month for the next 2 months, it said.

Government and trade sources said last week India was unlikely to allow new cotton exports when ministers meet and may not lift the ban at least until July.

Cotton exports have put the commerce and agriculture ministries at loggerheads, with influential coalition ally agriculture minister Sharad Pawar asking Prime Minister Manmohan Singh to lift the ban to help farmers