Cotton Procurement at MSP Surges to 63 Lakh Bales Amid Price Concerns

CCI Secures 46% of Market Arrivals in 2024-25 Season

The Cotton Corporation of India (CCI) has achieved the procurement of 63 lakh bales of kapas at the Minimum Support Price (MSP), representing 46% of the overall market arrivals. The primary states contributing to this procurement include Telangana (32 lakh bales), Maharashtra (16 lakh bales), and Gujarat (5 lakh bales). Nevertheless, despite these procurement efforts, kapas prices continue to fall below the MSP, raising concerns about the profitability of farmers.

Key Insights

- 63 lakh bales procured, constituting 46% of market arrivals.

- Major procurement states: Telangana, Maharashtra, Gujarat.

- Kapas prices are below MSP, while prices for pressed cotton are on the rise.

- Cottonseed prices have surged by 10-15% due to supply constraints.

- Total market arrivals are approximately 136 lakh bales, which is about half of the anticipated 300 lakh bales.

Market Trends and Pricing Shifts

While kapas prices remain under the MSP, the prices for pressed cotton have increased by ?1,000-1,250 per candy, with current rates ranging from ?53,500-54,500 per candy. This increase is largely attributed to heightened demand from textile mills and a 10-15% rise in cottonseed prices, which now stand between ?3,400-3,500 per quintal due to supply shortages.

Outlook for the Market

Although CCI's procurement initiatives have provided some relief to cotton farmers, the persistent price gap between market rates and MSP remains a significant concern. The increase in cottonseed and pressed cotton prices indicates a potential rise in kapas prices in the near future. However, ongoing government intervention through procurement and market support will be essential to ensure stable returns for cotton farmers and to maintain market balance.

Factors Contributing to the Current Situation:

- Supply Constraints: Cotton arrivals are considerably lower than anticipated, resulting in a 10-15% increase in cottonseed prices.

- Price Disparity: Kapas prices are below MSP, adversely affecting farmer earnings.

- Increased demand for pressed cotton.

Conclusion

The ongoing efforts by CCI to procure cotton at MSP have provided some relief to farmers, but the persistent gap between market prices and MSP continues to raise concerns. Continued government intervention and market support will be critical in stabilizing prices, ensuring fair returns for farmers, and maintaining the overall health of the cotton industry.

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