Floods in Andhra Pradesh and Karnataka have damaged 6-7 lakh bales of cotton, against the backdrop of high prices of the commodity.
"The main cotton growing districts of Andhra Pradesh like Kurnool, Krishna and Mehboobnagar have been severely hit by the floods," a senior Textiles Ministry official said.
The damage to the crop comes in the wake of high cotton prices, which remained an area of concern for the textiles mills in the last season (October-September 2009).
While the flood impact may not be severe for the overall cotton production, it comes at a time when the global pricing pressure is likely to continue this season as well in the wake of decline in production in the US and China, Confederation of Indian Textiles Industry Secretary General D K Nair said.
"Prices in the international market may rise...," Nair said.
India produced 290 lakh bales (170 kg each) in the last season. The average demand of the country's mills is about 230 lakh bales.
As per industry experts, as the global economy shows signs of recovery, the demand for cotton is expected to rise in both domestic and international markets.
In 2008-09, the government increased the MSP for standard cotton (long staple) to Rs 3,000 per quintal from Rs 2,030 in the previous year. The MSP of medium staple cotton was raised to Rs 2,500 from Rs 1,800 per quintal.