After Anand Sharma, Minister of Commerce, Industry and Textiles held a review meeting to discuss and stabilise the sharp fall in cotton prices, the Indian government is all set to intervene in the cotton market as prices begin to touch MSP (minimum support price) levels in some areas.

The Government has also revised MSP prices for medium staple cotton from Rs 2,800 per quintal to Rs 3,600 and for long staple cotton from Rs 3,300 to Rs 3,900 per quintal for the 2012/13 cotton season. Current estimates suggest an exportable surplus of cotton of seven million bales, based on production of about 33.4 million bales and consumption of about 26 million bales.                                                                                                                                                

According to the ministry while domestic cotton consumption was rising, there had been a sharp decline in global trade and an increase in world stocks, creating downward price pressure. Domestic prices had already touched MSP levels in some parts of Andhra Pradesh, and were close to MSP levels in Maharashtra, Punjab, Rajasthan and Madhya Pradesh. 

The government’s contingency plan is to source some nine million bales under MSP operations in the current season, via 288 procurement centres in nine states. The centres will be based in Punjab (20 centres), Haryana (14), Rajasthan (28), Gujarat (47), Maharashtra (55), Andhra Pradesh (17), Karnataka (13) and Orissa (seven).

Commerce.nic.in