West Asia Crisis Jacks Up Cotton And MMF Prices By Around 30 pc
Fertilizer prices have increased about 40% during January–April 2026, leading to higher cotton prices
Chennai: The ongoing crisis in West Asia has led to a sharp escalation in input costs across the textile value chain, with cotton and man-made fibre prices increasing by 15-30 per cent.
Fertilizer prices have increased about 40% during January–April 2026, leading to higher cotton prices. Increase in the price of crude oil and its derivatives has resulted in sharp increase in the price of raw materials and intermediates used for man-made fibre (MMF). These developments have led to an increase in prices of cotton and man-made fibres by 15-30 percent since February 2026, finds a study by Confederation of Indian Textile Industry.
MSP has been rising steadily and has increased by around 98% during the last 10 years in absolute terms and by 48% in US dollar terms. As a result, the calculated Indian cotton price based on MSP also has increased by 69% during the last 10 years.
Futures trading on exchanges like Multi Commodity Exchange of India and National Commodity & Derivatives Exchange strongly influences domestic cotton price discovery and volatility. These benchmark prices often drive spot market expectations, affecting procurement costs for mills and exporters.
In view of such unprecedented global disruptions and their cascading impact on domestic cost structures, there is a need for a responsive policy mechanism to address sudden input cost shocks and ensure stability in raw material availability and pricing. Removal of import duty would serve as an immediate and effective policy response to mitigate the impact of such disruptions, enable alignment with global prices, and safeguard the competitiveness of the downstream textile value chain.
A Cotton Price Stabilization Fund scheme with 5% interest subvention may be considered to mitigate working capital during peak season, for cotton procured during November–March, CITI said.
