- MSP buying crosses 78.8 lakh bales amid weak open-market demand
- Active CCI auctions, imports keep supply comfortable for mills
India’s cotton market continues to be driven by strong government intervention, with the Cotton Corporation of India (CCI) stepping up MSP procurement while simultaneously releasing stocks through regular auctions. As of 9 January 2026, CCI has procured 78.8 lakh bales, adding 10.23 lakh bales in a single week and averaging close to 2.05 lakh bales per working day. The highest procurement was in Maharashtra and Telangana, indicating that open-market kapas prices in major producing belts remain below MSP, pushing farmers towards CCI centres instead of private buyers.
On the sales side, CCI activity has intensified this season. Up to early January, CCI has sold around 99.4 lakh bales from the 2024-25 crop, a sharp increase compared with 32.8 lakh bales sold during the whole of 2023-24. This aggressive liquidation highlights CCI’s intent to prevent inventory build-up even as fresh procurement continues. Weekly auction volumes in early January averaged about 2.2-2.3 lakh bales, showing steady participation from spinning millers and traders.
Auction pricing is being guided by CCI’s published floor prices. In its latest floor price sheet dated 13 January 2026 for 2024-25 stock, CCI indicated levels broadly in the INR 51,500-53,500 per candy range across key benchmarks. Indicative floors include Sirsa at INR 51,500-51,800/candy, Indore at around INR 53,200/candy, Rajkot near INR 53,500/candy, and Warangal in the INR 53,000-53,500/candy range, depending on staple length (28-29mm) and micronaire (3.5-4.5mic) parameters. These levels are largely aligned with prevailing spot prices, allowing regular offtake while limiting sharp price spikes.
The broader supply picture remains comfortable. Although domestic cotton production in 2025-26 is estimated slightly lower y-o-y, higher imports during the temporary duty-free window and sizeable CCI stocks have offset the decline. Yarn demand, both domestic and export, remains subdued, which explains the limited appetite from private trade and the continued reliance on MSP procurement.
Outlook
Looking ahead, CCI’s dual role as a large buyer and an active seller will continue to anchor the market. If open-market demand does not revive meaningfully, MSP procurement is likely to stay strong through peak arrivals. However, steady auction sales at current floor prices and comfortable overall supply are expected to cap any major upside in cotton prices. For ginners, spinning millers, and brokers, near-term direction will hinge on auction volumes, any revision in CCI floor prices, and early signals of recovery in yarn offtake.
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