According to the Ministry of Textiles, the current cotton marketing season (October 2023 to September 2024) features one of the highest rates of cotton consumption in the last ten years.
Indian textile factories are running at 75–80 percent capacity despite increased production costs, and exports of cotton yarn are significantly up. It is anticipated that 325.22 lakh bales of cotton will be produced, with 12 lakh bales to be imported and 28 lakh bales to be exported.
However, Indian cotton prices remain higher than international rates, posing challenges for mill owners.
Meanwhile, the Textile Commissioner, Roop Rashi, estimates a demand of 307 lakh bales, including 103 lakh bales from MSME textile units.
According to the COCPC, MSME cotton consumption is expected to increase from 99.83 lakh bales in 2022–2023 to 103 lakh bales in 2023–2024, indicating favorable growth for the industry.
In terms of cotton production, this season’s cotton production is projected at 325.22 lakh bales down from 336.60 lakh bales in the previous season.
The industry expects imports of 12 lakh bales and exports of 28 lakh bales. The closing stock at the end of the season is anticipated to be 47.38 lakh bales. Though the capacity of textile mills is between 75 and 80 percent, but the necessity for cotton will increase in proportion to an increase in capacity utilization.
However, due to high manufacturing costs, mill owners are finding it difficult to achieve improved profit margins even with an increase in production and exports. As the season goes on, it will be essential to implement strategies to maximize expenses and boost margins.
