India hikes MSP for cotton by over 7% for 2024-25 season

20 Jun '24

2 min read

India hikes MSP for cotton by over 7% for 2024-25 season

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Indian government has raised the MSP for cotton by over 7 per cent for the 2024-25 marketing season.
Medium staple cotton's MSP increased to ₹7,121 (~$85.36) per quintal and long staple to ₹7,521 (~$90.15) per quintal.
Industry sources indicate this will raise production costs due to higher cotton prices, with market prices likely staying above the MSP.

The Indian government has increased cotton purchase prices by more than 7 per cent for the upcoming marketing season of 2024-25. The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the increase in the Minimum Support Prices (MSP) for all mandated Kharif crops for this season. Sources from the Indian textile industry expect this will raise the cost of production in the value chain.

According to a government press release, the MSP for medium staple cotton (seen cotton) has been increased to ₹7,121 (~$85.36) per quintal from ₹6,620 per quintal last year. This represents a ₹501 per quintal increase over last year’s MSP. Similarly, the government’s nodal agency, the Cotton Corporation of India (CCI), will purchase long staple cotton at the new MSP of ₹7,521 (~$90.15) per quintal, which is ₹501 higher than the previous MSP of ₹7,020 per quintal. Therefore, the government has hiked the MSP by 7.56 per cent for medium staple and 7.13 per cent for long staple cotton.

Industry sources have predicted that the increase in MSP will drive up production costs, as ginners and spinners will encounter higher cotton prices. The market price of cotton is anticipated to remain above the MSP level. However, opinions are divided on whether spinners, as well as fabric and garment manufacturers, will be able to transfer these increased production costs to their buyers, given the sluggish global demand.

Fibre2Fashion News Desk (KUL)

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