After the government on Wednesday raised the minimum support price (MSP) for the commodity for the 2023–24 marketing season by over 9% year-over-year, cotton prices, which have dropped by over 25% in the last eight months, are anticipated to stabilise.
There was a shortage of cotton on the market as a result of the disturbance caused by cotton farmers who were hanging onto their crop in anticipation of higher prices as a result of the price decline.
Cotton costs are at Rs 7,200 per quintal, down from a peak of Rs 10,000 in October. According to industry analysts, farmers may choose to wait until the following season to sell at the new MSP of Rs 7,020/quintal if the price decline persists.
“The rise in cotton’s MSP will also aid to cap the downward trend in cotton prices,” said BS Rajpal, a veteran cotton ginner from Maharashtra, which has the highest area under cotton in the country. “Instead of selling cotton at lower rates.
Sharma added, “However, anticipating higher production in cotton for marketing year 2023-24, if mandi prices witness a decline, this higher MSP will bode well for farmer income in Maharashtra, Telangana and Gujarat, which are key cotton-producing states.”
