Centre will buy cotton if the prices drop below MSP says, Officials
On November 12, the mandi prices of Bt cotton in Sri Karanpur hit their highest point of the year at ₹9,450/quintal. On December 20, they dropped to their lowest point of the year at ₹7,800/quintal, and on December 21, they settled at ₹8,450/quintal.
The government is keeping an eye on the prices of cotton on the open market in each state, which is currently higher than the minimum support prices (MSP) that the government set for this season. Officials have said that we’ll start buying things ‘immediately’ if prices fall below the MSP.
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‘Right now, prices in each state are higher than the cotton MSP. If prices go down, MSP will start to work. At this point, it doesn’t matter. But if the situation calls for it, we are ready to start buying things at MSP. ‘It would happen right away,’ a person in charge of looking into the situation told.
The MSP for medium staple cotton for the 2022-23 cotton year (October to September) is set at ₹6,080 per quintal. All of the major cotton-producing states have average cotton mandi prices that are much higher than that. But there are big changes, and government data shows that prices dropped in most states from December 1 to 21 compared to November.
For example, mandi prices of Bt cotton in Sri Karanpur rose to ₹9,450/quintal on November 12, which was the highest price of the year. On December 20, they dropped to ₹7,800, but on December 21, they went back up to ₹8,450.
‘This year, I’ve already sold half of my cotton, and I got an average of ₹8,500 per quintal. This year, the price of mandi has changed a lot, sometimes by as much as ₹1,000/quintal in a single day. I hope to sell my remaining stock at ₹9,000/quintal because the prices change so much. I hope it gets to that point. ‘This change is strange and has never happened before,’ said Sukhvinder Pal Singh of Sri Karanpur in the Ganganagar district of Rajasthan, who grew and sold about 600 quintals of cotton this year.
According to data from the Agrimarket portal, the average price of cotton at the mandi in Madhya Pradesh was ₹8,376 per quintal in November but dropped to ₹7,869 per quintal from December 1–21. In December, prices were lower than they were in November in Telangana, Haryana, Gujarat, Maharashtra, and Rajasthan. In Punjab, however, prices were almost the same as in November.
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Some groups of cotton farmers have been arguing to the government that the MSP for cotton should go up because the cost of production has gone up. The government has not yet replied to the request, though.
This week, the Cotton Association of India updated its estimates of how much cotton will be grown during the 2022–2023 season. The estimates say that 339,75,000 bales of cotton will be grown during that season. The most recent estimate is about 4.25 lakh bales less than the first estimate. We think that 307.05 lakh bales of cotton were grown during the last growing season.