The cotton market is currently experiencing a positive shift, with prices strengthening due to a combination of government procurement efforts and increasing industrial demand.

The Cotton Corporation of India (CCI) is actively buying cotton at the Minimum Support Price (MSP) from farmers in major producing states, which has contributed to stabilizing prices.

In addition to government purchases, industrial and export demand for cotton is picking up, further boosting prices.

The government has set the MSP for cotton for the 2024-25 season at Rs 7,121 per quintal for medium fiber varieties and Rs 7,521 per quintal for long fiber varieties. In some major cotton mandis, the price of cotton has surpassed these MSP levels, providing much-needed relief to farmers.

However, the cotton production is expected to be lower in the current season, with a decrease in the sowing area and crop damage due to floods and rains, leading to a decrease in overall production.

The Union Agriculture Ministry has estimated a drop of around 26 lakh bales (each bale weighing 170 kg), from 325.22 lakh bales in 2023-24 to 299.26 lakh bales in 2024-25.

The decrease in production, combined with robust demand from both domestic industry and export markets such as Bangladesh, China, and Vietnam, is expected to keep cotton prices strong.

The government's active purchasing strategies, particularly in key producing states like Telangana and Maharashtra, are also helping to support prices.