CCI said, ready to deal with any possibility of increase in MSP
Amid concerns that cotton prices will come under pressure after the removal of import duty till September 30, state-run Cotton Corporation of India (CCI) said it is fully prepared to intervene in the market during the new season starting from October.
"We are ready. We are fully prepared to deal with any possibility of increase in operations," CCI Chairman-cum-Managing Director Lalit Kumar Gupta told BusinessLine. "On behalf of the government, we can assure farmers that they should not panic and there should be no distress sale," he said.
Gupta said the duty cut has been done on the demand of the industry and the recommendation of the ministry and stakeholders, but it will not affect the interests of farmers as there is no arrival of cotton at present. He said, "This step will help the industry when there is no arrival." Boost to textile industry
According to the textile industry, the duty cut on cotton imports will increase the competitiveness of Indian exporters, who are facing a 50 per cent duty in the US, their biggest market. Domestic cotton prices are currently 10-12 per cent higher than global prices. However, farmers and farmer groups have expressed concern that the removal of duty will hit their income.
CCI had procured about one-third of the crop at minimum support price (MSP) during 2024-25, which brought stability to the market as raw cotton prices remained below the MSP level during most marketing seasons. Gupta said that out of the 1 crore bales (170 kg each) procured during the current 2024-25 season, CCI currently has a stock of 27 lakh bales. "Our target is to sell the stock completely before the new season," he said.
Following the duty cut, which made cheaper cotton available to Indian textile mills, CCI has reduced the minimum price for its cotton sales by ₹1,100 per candy (356 kg). "We have corrected the prices," Gupta said. He further added that this was done in response to the market.
On Wednesday, CCI had reduced the selling price by ₹500 per candy, and by ₹600 on Tuesday. Going forward, the pricing of CCI cotton will be based on day-to-day market conditions, he said.
Higher MSP
For the 2025-26 cotton season, the government has announced an 8 per cent increase in MSP for medium staple variety to ₹7,110 per quintal and for long staple to ₹8,110 per quintal. With the correction in prices, the gap between the market price and MSP would have increased.
"Our role in the market will be much more important to protect farmers. Right now, we anticipate that procurement may exceed last year's level. We are prepared to deal with any situation, more than any previous year. We have no infrastructure limitations or constraints," Gupta said. He further added that during the Covid period, CCI had procured 2 crore bales of cotton.
Farmers across the country have sown cotton in about 107.87 lakh hectares (lh) this year, which is about three per cent less than last year's 111.11 lh till August 19. This decline has been seen mainly in top producing states like Gujarat and Maharashtra, where a section of farmers are turning to alternative crops like groundnut, maize and pulses. However, southern states like Karnataka, Telangana and Andhra Pradesh have seen an increase in acreage. According to the trade, the crop condition is good, and higher yields are expected to compensate for the decline in acreage. According to the third advance estimate, cotton production during 2024-25 stood at 306.92 lakh bales.
Further, Gupta said that due to late rains across the country, cotton arrivals may get delayed, which will start in October and improve from November. He also said that MSP procurement will be a paperless process during 2025-26, as CCI will soon launch a new mobile app through which farmers can self-register and book slots to bring their produce to procurement centres.
