For the 2024-25 marketing season, the Indian government has raised the Minimum Support Prices (MSP) for cotton by over 7 per cent. Approved by the Union Cabinet under Prime Minister NarendraModi, this decision applies to all mandated Kharif crops for the season. According to sources within the Indian textile industry, this increase is expected to elevate production costs throughout the value chain.
As per a recent government press release, the MSP for medium staple cotton (known as seen cotton) will increase by 7.56 per cent to Rs7,121 per quintal from Rs 6,620 per quintal. MSP for long staple cotton will rise by 7.13 per cent to Rs7,521 per quintal from Rs7,020 per quintal. The new MSPs will be implemented by the government’s nodal agency, Cotton Corporation of India (CCI).
Industry experts believe,the MSP increase will boost production costs for ginners and spinners due to the elevated cotton prices. While the market price of cotton is expected to stay above the MSP level, there is uncertainty regarding whether spinners, fabric, and garment manufacturers will be able to pass on these increased costs to their buyers. This concern is compounded by the current sluggish global demand for textiles.
