The minimum support price (MSP) cotton purchased increased 134.79 per cent in December 2020 to 3874000 bales from 1650000 bales in previous month and rose by 78.44 per cent in January 2021 to 3121000 bales from 1749000 bales in January 2020. The boost was caused due to strong international cotton market, recovering crude & mitigation of Sino-US trade battle.

The MSP for both long staple cotton and medium staple cotton has increased by 4.95 per cent from 2019/20 to 2020/21. The prices of medium staple cotton and long staple cotton were 5,255 INR/quintal and 5,550 INR/quintal in 2019/20 and surged to 5,515 INR/quintal and 5,825 INR/quintal in 2020/21 respectively. According to India’s MSP programme, the prices of cotton are set at 150 per cent of the estimated cost of production.

The major upswing for the MSP for cotton in India had started in June 2020. The MSP of cotton climbed to 3696000 bales in January 2021 from 1460000 in December 2020 with a rise of 153.15 per cent.

Due to disruptions caused by the pandemic in the cotton supply chain, the government of India has supported the scheme of MSP for cotton during the year 2019/20. The scheme protects the cotton producers from the challenges faced due to market fluctuations in the cotton industry.