India's cotton consumption is expected to rise in this decade

31 Jan '11

3 min read

India's textile industry will need additional 10 million metric tons of fibers in order to reach a value of US$ 220 billion by 2020. According to Mr. Ashish Dhir, Associate Vice-President of Technopak Advisors Pvt. Ltd., New Delhi, India's textile industry which is valued at US $70 billion in 2009 is estimated to reach US$ 220 billion by the end of this decade. By 2020, the domestic market will be US$ 140 billion and the export market will be worth at US$ 80 billion.

At the present level, India's textile industry consumes 8 million metric tons of fibers. Of the additional 10 million tons of the fiber requirement, only three million tons can be contributed by cotton, according to Ashish Dhir. Mr. Dhir told this scribe on the sidelines of the 66th annual conference of the Textile Association (India) in Bangalore (January 28th & 29th 2011) that due to land requirement for food crops, acreage enhancement for cotton production will be limited.

Dr. Keshav Raj Kranti, Director of the Central Research for Cotton Research, Nagpur, India told this author in Bangalore that the cotton acreage increase will be limited and the total acreage can reach a maximum level of 11.5 million hectares only. Current cotton acreage has been 11 million hectares. He insisted that yield enhancement will be the way to increase the production.

Mr. Badami, Vice-President, Polyester, Reliance Industries, Ltd., in his address at conference highlighted that the growth in demand of fibers in recent past in India has been 6.5% whereas, the world-wide growth in fiber demand has been only 2.4%.

India's current installed ring spinning spindle capacity is 43 million and this is expected to be increased by 2 to 3 million spindles in the next 2-3 years. Increase and replacement of old spindles which may touch 3 million soon will lead to more cotton consumption as well as other fibers by the domestic spinning industry.

Recently, Coimbatore based The South Indian Mills' Association has estimated lower production for the 2010-11 season, which will be 30.9 million bales (170 kg each). Currently, the cotton price is shooting up due to the bulk purchases by exporters and the excessive need by the South Indian mills. On January 30th, spot price for Sankar-6 has been Rupees 51,000 per candy (356 kg). The price on January 7th was Rupees 42,000 per candy. In 3 weeks time, the price has shot up by over 20%.

According to an executive of Maxwell Industries, the manufacturer of the popular VIP brand cotton undergarments, currently it is difficult to get bulk quantity of bales due to supply squeeze and according to him, in few months the Indian spinning industry may face acute cotton short supply. He expressed a concern that India may need to import cotton and cotton prices can further sky rocket if the current situation persists.

Seshadri Ramkumar

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