Cotton prices in India are increasing continuously due to an acute shortage in the market. This season, cotton prices have increased by 3 percent above the Minimum Support Price (MSP), with experts predicting further increases in the near future.

The price hike is being driven by several factors including a decline in cotton cultivation by 11 lakh hectare in the current Kharif season. A significant damage caused to the cotton due to heavy rains in key cotton-producing states like Maharashtra, Telangana, and Andhra Pradesh is another factor driving this price rise. Additionally, cotton sowing in Punjab has also reduced compared to last year.

Last season, farmers faced heavy losses due to a caterpillar pest outbreak that severely impacted cotton yields, making it difficult for them to recover production costs. This has disheartened many farmers from cotton cultivation this year, leading to a noticeable decrease in sowing.

According to the Union Ministry of Agriculture and Farmers Welfare, by Sep 2, 2024, cotton cultivation across India declined to 111.74 lakh hectarefrom 123.11 lakh hectare recorded last year.

Cotton prices are rising sharply in the wholesale markets. In Surat and Rajkot, the average cotton priceshave reached between Rs 7,525 and Rs 7,715 per quintal. In Amreli Mandi, cotton is priced at Rs 7,450 per quintal, while in Chitradurga Mandi, the maximum price has touched Rs 12,222 per quintal.

The central government has raised the MSP for cotton by Rs 501 for the 2024-25 Season. The MSP now stands at Rs 7,121 per quintal for the medium staple category and Rs 7,521 per quintal for the long staple category.

Currently, the average market price for cotton exceeds MSP by Rs 300-400. With this gap further widening, cotton prices are likely to increase even further, creating new challenges for both farmers and the market.