Friday, 20 June 2025
The Cotton Association of India (CAI) has renewed calls for the introduction of a price deficiency payment scheme for the cotton sector, as market prices have remained below the Minimum Support Price (MSP) through much of the 2024–25 season. The bearish trend has compelled the state-run Cotton Corporation of India (CCI) to procure over 100 lakh bales at MSP to support farmers.
At a recent stakeholders’ meeting, CAI highlighted that the consistent hike in MSPs is distorting natural price discovery and straining the cotton value chain. For the 2025 kharif season, MSP for medium staple cotton has been raised to Rs 7,710 per quintal from Rs 7,121 last year, while the rate for long staple cotton has increased to Rs 8,110 from Rs 7,521. However, weak global demand and declining prices have kept domestic market rates under pressure.
Industry stakeholders voiced concern that rising MSPs are inflating production costs for textile mills, reducing India’s global competitiveness and increasing the risk of consumer price escalation. CAI President Atul S. Ganatra stated that while supporting farmers remains critical, a more balanced approach—such as a Bhavantar-style price deficiency payment mechanism—is needed to ensure sector-wide sustainability. Suggestions also included revisiting the CCI’s sales policy to align better with market realities.
Suresh Kotak, Chairman of the Textile Advisory Group, endorsed the idea of policy recalibration and assured that the suggestions would be taken up with the government.
On the production front, CAI has pegged India’s 2024–25 cotton crop at 301.15 lakh bales (170 kg each), with imports projected to more than double to 39 lakh bales, up from 15.2 lakh bales last season. Domestic consumption is estimated at 305 lakh bales, slightly down from 313 lakh bales last year, while exports are likely to fall to 17 lakh bales from 28.36 lakh bales. Closing stocks are expected to rise significantly to 48.34 lakh bales, compared to 30.19 lakh bales in the previous season.
