The cotton industry is eagerly awaiting a rebound after a poor year, with sales volume predicted to increase by 5-7% compared to the previous one. Industry watchers contend that the optimism is based on elements including the convergence of cotton pricing in India with global prices, a shift in demand from rival countries, and a gradual revival of demand from China.
The Indian cotton industry, which is attempting to bounce back from the underwhelming performance in FY23, is anticipated to benefit from expectations of a prosperous festival season for retailers in the domestic market and a recovery in global demand from downstream industries.
Ashwin Thakkar, vice president of the Textile Association of India, commented on the anticipated performance of the sector in the upcoming months, saying, “The sector is steadily working its way out of the crisis and the upcoming months would be brighter for the cotton business. People have spent a lot of money on travel and personal care, therefore this holiday season is predicted to see a high demand for textiles, particularly in the retail sector.
He stated, “We do not see any end to the Ukraine-Russia crisis which is harming the demand in European and American markets which are our primary export destinations, therefore the worldwide demand for Indian products may not see much change in the medium term. However, South Asian nations are growing well and might alter demand trends in the year’s second half.
A CareEdge analysis predicts that the Indian cotton yarn market will experience a 5-7% increase in sales volume and an increase of 100-150 basis points (bps) in operating profit from FY23 to FY24. In the previous season, Cotton Season (CS) 2020–21, India produced 35.2 million bales of cotton. In CS 2021–22, that number dropped to 31.1 million bales. Cotton prices sharply increased as a result of the decreased cotton production. In FY23, the average domestic cotton price reached a high of about Rs. 1 lakh per candy (Rs. 280/kg). India saw its lowest cotton yarn exports in a decade as a result of the substantial gap between domestic and foreign pricing for cotton. India exported 664,000 tonnes of cotton yarn in FY23, compared to the global average of 1,389,000 tonne in exports in FY22, the most for the decade.
The cotton farmers are enthused about the fibre crop despite difficulties last year. According to the most recent data provided by the Gujarati government, the farmers in Gujarat had already finished growing cotton on 2.53 million hectares of land as of July 17 of last year. Although this area is a little less than the 2.55 million hectares of the previous year, the sowing season will continue for at least two more weeks, and it is anticipated that the overall area under the crop will be greater than the area the year before.
Domestic cotton prices are currently between ‘56,000 and ‘57,000 per sweet, down from a high of roughly’ lakh. This cotton pricing will make it more competitive because it is on par with worldwide prices. on the international market of Indian cotton.
