India Cotton Acreage Seen Rising on MSP Support by Amit Gupta, Kedia Advisory
India's cotton acreage is expected to increase significantly during the 2026 kharif season as farmers shift towards the crop due to higher MSP, lower water requirements, and concerns over below-normal rainfall. Trade estimates suggest cotton sowing could exceed 130 lakh hectares, compared to 114.82 lakh hectares last year. Strong gains are expected across Central and South India, while Rajasthan may offset acreage declines in Punjab and Haryana. Despite positive sowing prospects, cotton demand remains weak as lower yarn prices and sluggish textile activity continue to affect mill purchases, prompting the Cotton Corporation of India to reduce selling prices.
Key Highlights
- India's cotton acreage may rise 15% in key growing regions this season.
- Total cotton sowing is expected to exceed 130 lakh hectares.
- Higher MSP and CCI procurement are encouraging farmers to plant cotton.
- Cotton is being preferred due to lower water requirements amid rainfall concerns.
- Weak yarn demand continues to limit cotton buying by textile mills.
Cotton market sentiment is receiving support from expectations of a significant increase in acreage during the 2026 kharif season. Farmers across major cotton-growing regions are showing a strong preference for cotton cultivation, encouraged by higher minimum support prices (MSP), continued government procurement support, and concerns over below-normal rainfall during the monsoon season.
Early sowing data from Gujarat indicates a strong start, with cotton planted on more than 93,000 hectares as of June 8, substantially higher than the corresponding period last year. Trade estimates suggest cotton acreage could rise by around 15% in Central India and 10-20% in South India. While acreage may decline in Punjab and Haryana, higher planting in Rajasthan is expected to result in overall growth across the northern region as well.
At the national level, cotton sowing is projected to exceed 130 lakh hectares, compared with approximately 114.82 lakh hectares during the previous season. The increase is largely attributed to cotton's relatively lower water requirement compared to competing crops. With concerns growing over the possibility of El Niño and below-normal rainfall, many farmers view cotton as a safer cropping option.
The government's decision to raise cotton MSP by Rs 557 per quintal for the 2026-27 season has further strengthened planting intentions. Continued procurement by the Cotton Corporation of India (CCI) at MSP levels has also provided confidence to growers regarding price support.
However, despite the favorable production outlook, demand conditions remain weak. Cotton consumption by mills has been affected by sluggish yarn demand and lower yarn prices. To stimulate market activity, the CCI recently reduced its cotton selling price by Rs 2,500 per candy, helping improve sales volumes to mills and traders.
Higher MSP, favorable sowing economics, and weather-related concerns are driving cotton acreage expansion, though weak textile demand remains a key challenge for sustaining stronger cotton prices in the near term.
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