Jun 7, 2023
Indian farmers to earn more as government raises cotton MSP by 10%
Jun 7, 2023
The Indian government has announced an increase in the minimum support price for unginned cotton (Kapas), potentially boosting earnings for Indian farmers.
The decision, made by the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi, entails a raise of up to 10% for the forthcoming Kharif Marketing Season of 2023-24, which commences from October 1, 2023.
The MSP has been hiked by 8.9% to Rs6,620 per quintal ($80.24/100 kg) for medium staple cotton. The MSP for long staple fibre has been increased by 10% to Rs7,020 per quintal ($85.09/100 kg), the ministry of agriculture and farmers welfare said in a press release.
The market dynamics could also be a contributing factor to this increase. High cotton prices in the open market during the current season have meant that the Cotton Corporation of India (CCI), the government's cotton procurement company, has not been able to buy the natural fibre in significant quantities. At present, the cost of unginned cotton ranges between Rs7,200-7,500 per quintal.
With the new, higher MSP, the CCI is expected to procure more cotton in the next season, provided market prices ease with the arrival of new stock and align with the increased MSP.
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