The Centralised Cotton Purchase is an attempt for bulk procurement of quality cotton during the crop season at competitive prices. The textile industry is predominantly agricultural based, with cotton being one of the main raw materials and the major cost component (raw material accounts for about 60% of the total cost of production of the spinning industry). Being an agricultural commodity, the quality of cotton will be comparatively good during the prime crop season (harvest time), and hence, bulk procurement at this time will help improve the quality of finished products as well as volume of production (‘P’ grams). Taking into account the hardship to the textile spinning mills on account of the exorbitant hike in cotton prices ( due to adverse weather conditions ,speculative trade activities , exim policies etc.) as well as the acute working capital shortage to procure cotton, the Government of Kerala had come forward with the scheme of centralised purchase of cotton for the PSU/Co-op spinning mills under its control, using the loan funds provided by the Govt. as corpus fund for the operations. A Centralised Cotton Purchase Committee (CCPC) has also been constituted for the purpose with Secretary of RIAB, Managing Directors of KSTC/ TEXFED/ Mills as members. MD, KSTC being the convenor of the purchase committee, the activities of centralized purchase are being coordinated by KSTC. The purchases are on, since Dec ’ 09, based on the modalities fixed by the CCPC.