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India reaps bumper cotton, prices to dip further

Cotton prices have fallen in India and it can go down further when arrival starts picking up around Diwali across the country. The rise in acreage compared to previous year and a bumper crop are seen as the biggest factors that can see cotton prices stabilizing at around or even lower than the minimum support price.

The MSP for medium staple fiber of 27.5 to 28.5 mm length which is produced in Punjab is Rs 4,020 per quintal. Going by prices in the previous year, when they touched Rs 5,500 to Rs 5,600, cotton growers were expecting handsome prices this year as well.

After spending on pesticides and insecticides for fear of pest attacks on the cotton crop, cotton growers of Punjab are facing a double whammy of higher input costs and lower selling prices. Cotton was sown on 108.5 lakh hectares in the country in the previous season and in Punjab, Haryana and Rajasthan it was sown on 12.5 lakh hectares. This time, the acreage increased to 123 lakh hectares across the country and in Punjab, Haryana and Rajasthan it increased to 16 lakh hectares.

In the country, 350 lakh bales were produced last season and the number is expected to reach 385 lakh bales. Total consumption in India is of around 320 to 325 lakh bales. So 60 lakh bales will be surplus. This factor has brought down prices.