The MSP has been hiked by 8.9 per cent to ₹6,620 per quintal ($80.24/100 kg) for medium staple cotton. The MSP for long staple fibre has been increased by 10 per cent to ₹7,020 per quintal ($85.09/100 kg), the ministry of agriculture and farmers welfare said in a press release.
The Indian government has increased the MSP for unginned cotton by up to 10 per cent for the 2023-24 season.
The decision may also counter high market prices that have hindered cotton purchases by the Cotton Corporation of India (CCI).
With this increase, the CCI could potentially procure more cotton next season if market prices align with the new MSP.
The market dynamics could also be a contributing factor to this increase. High cotton prices in the open market during the current season have meant that the Cotton Corporation of India (CCI), the government’s cotton procurement company, has not been able to buy the natural fibre in significant quantities. At present, the cost of unginned cotton ranges between ₹7,200-7,500 per quintal.
With the new, higher MSP, the CCI is expected to procure more cotton in the next season, provided market prices ease with the arrival of new stock and align with the increased MSP.
Fibre2Fashion News Desk (KUL)