The Indian government’s cotton procurement for the 2024-25 marketing season (October-September) is projected to reach 10 million bales, each weighing 170 kg. The Cotton Corporation of India (CCI), the government’s procurement agency, has assured farmers that it will purchase all cotton brought to its designated procurement yards. According to trade sources, as of last week, CCI had already bought 8.6 million bales, indicating significant progress towards its target.
CCI has urged farmers to avoid distress sales, emphasizing that prices are hovering near the minimum support price (MSP). To support farmers, the agency reiterated its commitment to purchase all eligible produce brought to its yards. Reports suggest that around 80% of the cotton procurement is being carried out by CCI across several states. However, the agency has halted purchases in northern India due to a sharp decline in seed cotton arrivals in the region.
Reassuring farmers, CCI stated that it would continue procuring fair-grade cotton until the season’s final arrivals. L K Gupta, chairman and managing director of CCI, announced that procurement levels this season—already at 8.6 million bales—are significantly higher compared to last year’s 3.28 million bales. The increased MSP has been a key factor drawing farmers to CCI’s buying centers. Gupta added, “Procurement will continue until March 15, or as long as farmers continue selling cotton at MSP.” While some delays were reported in certain regions due to storage issues, these were resolved quickly.
With CCI purchasing a substantial portion of the cotton crop, the move will have significant implications for the textile industry. Out of the estimated total production of 30.42 million bales this season, CCI’s procurement could reach nearly a third of the country’s cotton output. Ginning mills, however, have struggled to purchase seed cotton due to price disparities, as market rates remain below the MSP. This situation could leave private ginners with limited cotton stocks in the months when arrivals slow down.
Industry experts say that CCI typically releases its cotton stocks after June. In recent months, it has cleared the inventory from last season and is expected to fix a base price for auctions based on the higher MSP. This approach is likely to push up cotton prices during non-arrival months. However, despite the government’s efforts, Indian cotton prices are facing pressure due to a lack of competitiveness in the international market. The ICE cotton March 2025 contract recently traded at 66.04 cents per pound, making Indian cotton approximately 16-17% more expensive. Traders note that the price disparity makes it difficult for Indian cotton, yarn, and fabric to compete in the export market, further dampening export prospects.
As CCI’s procurement continues to hit record levels, the impact on the domestic cotton market and the export sector will be closely watched.
