India’s cotton consumption rose 19% to the end of January as demand picks up, CAI said.

Cotton consumption increased due to increased market entry and increased demand from textile mills. In the first four months of the 2023-24 cotton season, from October to the end of January, consumption was estimated at 110,000,000 170 kg bales, up about 19 percent from a year ago. In October – the consumption of Christmas quarter was 81,000,000 bales compared with 65,000,000 bales for the year, which is an increase of nearly 20 per cent. “Factories lost money in the first quarter of last year. This year they are making a small profit so they are operating at full speed,” said Cotton Association of India (CAI) president Atul S Ganatra Business Line.

Mills in northern and central India are operating at 100 percent capacity, while the south has a capacity utilization rate of about 75 percent. The average capacity of Indian factories this year is about 90 percent, Ganatra said.

Maintains overweight rating

CAI maintained an overweight rating for the season 2023-24 from October at 294.10 lakh 170 kg bales. Total cotton till January-end 2024 is estimated at 210.05 lakh bales.

In the current season till January-end, 177.15 lakh bales entered the market against 115.70 lakh bales a year ago, according to CAI. Imports during the period were lower at 4.00 lakh bales compared to 5.8 lakh bales. CAI estimates the initial stock at 28.90 lakh bales. Exports at the end of January are estimated at 9,000,000 bales, double the amount of 4,000,000 bales a year ago.

Deliveries the same as last season

Stocks at the end of January are estimated at 91,05,170 kg bales. This includes 41 lakh bales with textile mills, equivalent to about 48 days of consumption, and the remaining 50.05 lakh bales with Cotton Corporation of India, Federation of Maharashtra and others (MNCs, traders, degenerates, etc.), said CAI. The association maintains its cotton total stock until the end of the 2023-2024 cotton season at the same level as previously estimated at 345,000 bales. This includes initial stocks of 28,90,000 bales, estimated compression capacity of 294,1,000 bales and seasonal imports of 22,000 bales. Cotton imports are expected to be 9.5,000 bales higher than 12.5,000 bales a year ago. In 2023-24, CAI’s domestic consumption is 311,000 bales, unchanged from last year. Exports for the 2023-2024 season are pegged at 14,000,000 bales against 15,50,000 bales and stocks at the end of September 2024 are estimated at 20,000,000 bales against last season’s 28,9000 bales.

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