The Cotton Corporation of India (CCI) will procure cotton from farmers in 11 producing states as the rates have fallen below the minimum support price (MSP). During the current cotton season 2014-15, prices of cotton are below MSP in the states of Andhra Pradesh, Telangana and Maharashtra. CCI is the government's nodal agency to procure cotton at the MSP, which is currently Rs 4,050/quintal for long staple.
The domestic cotton prices depend on a number of factors including previous balance, current supply, as well as future demand in both domestic and international markets. At present, cotton prices in international markets are ruling lower than the prices that prevailed during the corresponding period last year primarily due to lower demand by China and increased supply from the USA.
There is no proposal to increase the MSP of cotton. The Cotton Advisory Board has pegged the country's total cotton production at over 40 million bales in the 2014-15 crop year, as against 39.8 million bales in 2013-14. One bale contains 170 kg of cotton. Sluggish export demand and anticipated higher domestic production have resulted in rates falling below MSP in few states.