The Indian government absorbs 230 lac quintals of seed cotton, also known as kapas, till December 19, 2025, is a news doing rounds, as per the procurement figures that have been released by the Cotton Corporation of India – CCI. This goes on to translate into 38.70 lakh bales of cotton weighing 170 kg procured all through the first 80 days of the 2025–26 marketing season, which commenced on October 1. It is well to be noted that CCI has been buying cotton at the minimum support price – MSP, which is at present higher as compared to the prevailing market rates. Because of this, the domestic market is indeed facing steep cotton prices amid the procurement by CCI and also subdued demand coming from downstream industries.
As Indian government absorbs 230 lac quintals of seed cotton, this aggressive procurement by CCI in the ongoing 2025–26 season is indeed going ahead and creating a paradox when it comes to the downstream textile industry. While the MSP-backed buying has indeed supported the farm-gate prices, the large volume of cotton moving into the CCI warehouses has gone on to decrease the free-market availability, even as the demand when it comes to cotton yarn, fabrics as well as garments remains pretty weak.
As per CCI procurement figures, which have been received by the domestic industry, the corporation had gone ahead and procured 230.23 lakh quintals of kapas as of December 19, 2025. At an average lint recovery of 35%, this goes on to translate into almost 38.70 lakh bales. This kind of quantity has effectively been withdrawn from the open circulation, thereby tightening the near-term availability when it comes to spinners as well as ginners.
Apparently, the industry sources point out the fact that the timing of this withdrawal of cotton from the open market is very crucial. Yarn offtake goes on to remain quite sluggish, fabric inventories look comfortable, and the garment demand, both domestically and export-led, continues to be pretty cautious. In such a demand scenario, higher cotton prices that are driven by restricted availability are going ahead and exerting pressure when it comes to spinning margins and not supporting the value-chain recovery.
The effect is most visible especially across central and southern India, where the procurement has been concentrated. Telangana, along with Maharashtra, comprises over 60% of the total CCI purchases thus far, thereby leaving mills within these regions increasingly dependent on warehouse-linked cotton and not spot-market supplies.
Spinners do maintain that while the MSP procurement is essential in distress years, large front-loaded buying sans having a clearly defined liquidation roadmap risks creating artificial tightness. As the cotton is locked in warehouses, prices fail to reflect the realities of downstream demand, therefore broadening the gap between raw material costs as well as finished goods realizations.
Industry stakeholders are hence requesting for a phased as well as a transparent release of CCI stocks, which are in sync with yarn as well as fabric demand cycles, in order to restore balance throughout the value chain and also safeguard the prolonged stress on mill economics.
