CCI says geared up to meet any eventuality of higher MSP operations

Amid concerns that cotton prices will come under pressure following the removal of import duty till September 30, the State-run Cotton Corporation of India (CCI) said it is fully geared up for market intervention during the new season starting October.

“We are there. We are completely geared up to meet any eventuality of higher operations,” said Lalit Kumar Gupta, Chairman-cum-Managing Director, CCI, told BusinessLine. “From the government side, we can assure farmers not to panic and that distress sales should not happen,” he said.

While stating that the duty cut was in response to industry demand and on the recommendation of the Ministry and stakeholders, Gupta said farmers’ interests would not be impacted as there is currently no arrival of cotton. “The move will support the industry when arrivals are not there,” he said.

Boost for textiles

According to the textiles industry, the duty cut on cotton imports will help enhance the competitiveness of Indian exporters, who face a 50 per cent tariff in the US, their largest market. Domestic cotton prices are currently 10-12 per cent higher than global prices. Farmers and farmer groups, however, have voiced concerns that the removal of duty will hurt their realisations.

CCI had procured about a third of the crop during 2024-25 at the minimum support price (MSP), lending stability to the market as raw cotton prices remained below MSP levels for most of the marketing season. Of the 1 crore bales (of 170 kg each) procured during the ongoing 2024-25 season, CCI is currently holding stocks of 27 lakh bales, Gupta said. “Our aim is to sell out the stocks completely ahead of the new season,” he added.

Following the duty cut, which made cheaper cotton accessible to Indian textile mills, CCI has reduced the floor price for its cotton sales by ₹1,100 per candy (of 356 kg). “We have made a correction in the prices,” Gupta said, adding that it was in response to the market.

On Wednesday, CCI reduced the sale price by ₹500 per candy, and on Tuesday it had reduced the price by ₹600. Going forward, the pricing of CCI cotton will be based on day-to-day market conditions, he said.

Higher MSP

For the 2025-26 cotton season, the government has announced an 8 per cent increase in MSP to ₹7,110 per quintal for the medium staple variety and ₹8,110 for the long staple. With the correction in prices, the gap between the market price and MSP might have widened.

“Our role will be far greater in the market to protect farmers. As of now, we project that procurement could exceed last year’s levels. We are ready to handle any situation, even more than in any of the previous years. We have no limit or constraint on infrastructure,” Gupta said, adding that during the Covid period, CCI had handled 2 crore bales.

Farmers across the country have planted cotton on about 107.87 lakh hectares (lh) this year, down by about three per cent from the previous year’s 111.11 lh as of August 19. The decline has mainly been witnessed in the top producing States of Gujarat and Maharashtra, where a section of farmers have shifted to alternative crops such as groundnut, maize and pulses. However, the southern States, led by Karnataka, Telangana and Andhra Pradesh, have seen an increase in acreage. According to the trade, the crop condition is good, and higher yields are expected to offset the decline in area. Cotton production during 2024-25, per the third advance estimates, stood at 306.92 lakh bales.

Further, Gupta said the current spell of late rains across the country could delay arrivals, which would start in October and then improve from November. He also said MSP procurement will be a paperless process during 2025-26, as CCI will shortly launch a new mobile app through which farmers can self-register and book slots for bringing their produce to procurement centres.

Published on August 20, 2025