India’s Subsidy Could Hurt Cotton Prices
September 8, 2009
World prices could suffer because India increased its subsidy for cotton farmers in a program similar to U.S. marketing assistance loans. A report from Texas Tech University’s Cotton Economics Research Institute (CERI) indicates that prices may drop as much as 6% as a result.
Written by: Jessica Behnham
World prices could suffer because India increased its subsidy for cotton farmers in
a program similar to U.S. marketing assistance loans. A report from Texas Tech University’s
Cotton Economics Research Institute (CERI) indicates that prices may drop as much
as 6% as a result.
The subsidy increase comes in India’s minimum price support for buying seed cotton
from farmers. Last September, India announced an increase of nearly 50% for seed cotton.
That equates to a cotton price of 72 cents per pound, the study says, while world
cotton price hovers in the mid-50s.