Cotton prices expected to stabilise due to 9% hike in MSP

The Indian government has increased its minimum support price (MSP) for cotton by about 9% year-on-year for the 2023-24 marketing season. Cotton prices have already fallen over 25% in the last eight months, leading to a shortage of cotton in the market.

The increase in MSP for the next season is expected to stabilise the prices and may lead to a 5% increase in cotton planting in India. Cotton processors are hopeful of getting enough raw material.

Cotton prices, which have fallen by over 25% in the last eight months, are expected to stabilise after the government on Wednesday increased its minimum support price (MSP) for the commodity for the 2023-24 marketing season by nearly 9% year-on-year.

The price drop had led to an unrest among cotton farmers who were holding on to their produce in expectation of better rates, creating a shortage of cotton.