Cotton shipments from India are expected to commence in September, heading southwards.
Published on August 8, 2025
The early monsoon has had a positive impact on the cotton crop in Karnataka and Andhra Pradesh for the 2025-26 season. The Cotton Association of India (CAI) reported daily arrivals of cotton, but specific cumulative figures for these states were not directly provided.
However, ongoing procurement operations under the Minimum Support Price (MSP) scheme indicate active market engagement in these regions. The MSP for medium staple cotton has been set at ₹7,710 per quintal, and for long staple cotton at ₹8,110 per quintal. There is also a premium of ₹30 per quintal for cotton of staple length 25.5 mm, reflecting quality-based price incentives.
The market conditions in Karnataka and Andhra Pradesh are favourable, with a renewed speculative interest in cotton contributing to steady increases in open interest and a generally positive market sentiment. The support price hikes by the Government of India have likely reinforced market confidence. NABARD reports an increased credit flow and agricultural support in Andhra Pradesh, potentially benefiting cotton farmers' liquidity and input purchase capacity.
The cotton sowing area for 2025-26 is around 110.49 lakh hectares, suggesting sustained crop planting levels. By the end of August, cotton arrivals are expected to start from areas like Adoni and Yemmiganur.
Despite the favourable conditions, the ongoing tariff issues are seen as a factor weighing on cotton prices, and prices may remain under pressure until some clarity emerges regarding the tariff issues. The demand for cotton is currently dull due to mills not buying because of the tariff issues affecting the textiles industry.
In other parts of the country, Tamil Nadu had the highest cotton arrivals (2,400 bales) on Friday, followed by Gujarat and Maharashtra (1,700 bales each). The prices of new summer cotton, with a moisture content of around 10%, are currently hovering between ₹55,000-55,900 per candy (356 kg). The prices of raw kapas (cotton seeds) are around ₹7,000 per quintal, similar to the beginning of the season last year.
The government has also announced seed prices for moist cotton, around ₹3,800-3,900 per quintal, while those for dry kapas seeds are around ₹4,100. Cotton arrivals from the kharif crop are expected to start from September first week onwards. Last year, cotton market arrivals in Karnataka started in October, but this year they are expected earlier due to the early monsoon.
The ongoing tariff issues continue to cast a shadow over the cotton market, but with the favourable conditions in Karnataka and Andhra Pradesh, farmers in these regions may still be hopeful for a bountiful cotton season.
- The renewed interest in cotton and the hikes in support prices by the Government of India are indicative of a positive business environment in the agriculture industry, particularly for cotton farmers in Karnataka and Andhra Pradesh.
- The ongoing tariff issues, however, are contributing to a dull demand for cotton in the textiles industry, weighing on the prices of the crop and potentially affecting the profitability of businesses in the finance sector.
- In response to the early monsoon and the favorable crop conditions, the government has announced seed prices for the upcoming cotton season, hoping to boost subscription and sustain business in the agriculture sector.
- The economy as a whole, including key industries like agriculture, finance, and textiles, is closely watching the tariff issues to gauge their impact on business and market trends for the coming months.
