Cotton consumption in India, the world’s second-biggest user, will beat a previous forecast, as demand for yarn has increased from textile mills, said Cotton Corporation of India (CCI). CCI is the country’s biggest buyer of the fiber.
Demand may be 25 million bales (4.25 million tonnes) in the year ending September 30, compared with 23 million bales estimated by the Cotton Advisory Board in February, Subhash Grover, managing director, CCI, said.
Increasing demand in India, also the world’s second-biggest exporter, may bolster a 44 per cent gain in global prices in the past six months. A revival in usage by textile mills and higher prices may prompt suppliers to sell more locally, Grover said.
“Yarn inventory with textile mills has really dried up,” Grover said. “Demand for textile products has picked up from January and is likely to sustain the momentum.”
Global cotton consumption will rise 0.9 per cent to 23.1 million tonnes in the year starting August 1, “assuming a modest recovery in world economic growth,” the International Cotton Advisory Committee said on May 1. Indian exports may not exceed 3.5 million bales this year, compared with 5 million bales estimated by the Cotton Advisory Board, Grover said. Traders sought government approval to ship 2.4 million bales in the nine months ended April, the Textiles Ministry said last week.
“Domestic cotton prices have increased in tandem with gains in the global market,” Grover said. “That may prompt some exporters to cancel deals and sell to local textile mills,” he added. Higher prices may prompt growers to increase the area under the crop next year and boost production, Grover said.
