India set for record cotton procurement as prices stay weak

India is gearing up for record cotton procurement from farmers for the second consecutive year. The government’s nodal agency, the Cotton Corporation of India (CCI), has procured 100 lakh bales of 170 kg during the current marketing season, which ends on September 30. Lower cotton prices in both domestic and global markets are expected to drive farmers to CCI procurement centres to secure better returns through the higher minimum support price (MSP) guaranteed by the government.

Although cotton acreage in the country has declined for the 2025–26 season, other factors are likely to push government procurement even higher. According to the Ministry of Agriculture, cotton acreage stood at 109.90 lakh hectares as of last Friday, down from 112.76 lakh hectares a year ago. Sowing has been completed, so this is the final acreage figure. The area was 123.71 lakh hectares in 2023–24 and averaged 129.50 lakh hectares over the past five years.

India is preparing for record cotton procurement for the second year in a row as prices remain below MSP, driving farmers to CCI centers.
Procurement begins October 1 in northern states, followed by central and southern belts later in the month.
CCI faces large carryover stocks of 62–65 lakh bales but will buy without quantity limits if prices stay weak, ensuring MSP support for farmers.

CCI is preparing to launch its annual procurement operations for seed cotton (kapas) under the MSP scheme for the 2025–26 season. The Ministry of Textiles confirmed that procurement will roll out in a phased manner beginning in October.

The first phase will start on October 1 in the northern states of Punjab, Haryana, Rajasthan, and parts of western Uttar Pradesh, where the harvest typically begins earliest. Procurement centres in these states are already being readied. In Punjab, some farmers have even started bringing cotton to mandis, and private trade is underway ahead of the official procurement schedule.

Central states—Maharashtra, Madhya Pradesh, and Gujarat—will follow next, with operations expected to begin on October 15, coinciding with peak arrivals. These three states account for the largest share of India’s cotton acreage, and CCI has announced that an extensive network of procurement centres will be set up to ensure MSP coverage. The final phase will cover the southern states—Telangana, Andhra Pradesh, Karnataka, and Tamil Nadu—where procurement is likely to begin around October 21.

Officials from the Ministry of Textiles emphasised that procurement will be undertaken without any quantitative ceiling—CCI will buy as much kapas as farmers bring, provided market prices remain below MSP. If prices stay higher, the agency will restrict itself to commercial purchases.

Record procurement is expected once again in the upcoming season. New arrivals in northern states have already pushed prices down by around 5–6 per cent over the past two weeks, with arrivals starting mid-September.

Market sources noted that the government has allowed duty-free cotton imports until the end of December 2025. CCI and traders, however, are struggling to offload last season’s cotton due to large carryover stocks. Market estimates suggest that 62–65 lakh bales will remain as closing stock this season, most of which are with CCI. Clearing this inventory is necessary to free up warehouse space for the new crop.

Traders believe there is little chance of price stability given sluggish consumption, especially after the imposition of 50 per cent US tariffs. Lower cotton prices in the open market are expected to force farmers to sell to CCI. The government has fixed the MSP for seed cotton (kapas) at ₹7,710 (Approx. $86.94) per quintal for 2025–26, up 8.27 per cent from last year’s MSP. Meanwhile, seed cotton is currently trading at ₹6,000–7,000 (Approx. $67.66-78.94) per quintal in north Indian markets as CCI’s purchase operations are yet to begin.

Fibre2Fashion News Desk (KUL)