Cotton industry to see 5-7% growth in volume sales in FY24

The Indian cotton yarn industry is expected to witness a sales volume growth of 5-7% in FY24 as per a report by CareEdge. Furthermore, the report suggests that the operating margin is likely to expand by 100-150 basis points (bps) when compared to FY23.

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Following a lacklustre year, the cotton industry is eagerly looking forward to a revival. According to a CareEdge report, the Indian cotton yarn industry would witness a sales volume growth of 5-7% in FY24. Additionally, there is an anticipation of the operating margin expanding by 100-150 basis points (bps) when compared to FY23.

Industry experts believe that several factors have driven this optimism. It includes the alignment of Indian cotton prices with international prices, a shift in demand from competing nations, and a gradual recovery in demand from China.

Ashwin Thakkar, Vice President, Textile Association of India, expressed his thoughts on the industry’s forthcoming performance. He stated, “The industry is gradually recovering from its challenges, and the upcoming months are anticipated to bring brighter prospects for the cotton sector. With people having spent significantly on travelling and personal care, this festival season is expected to generate a healthy demand for the textile sector, particularly in retail, which may experience robust demand.”

During the Cotton Season (CS) 2020-21, India’s cotton production declined from 35.2 million bales to 31.1 million bales in CS 2021-22. This decrease in cotton production led to a significant increase in cotton prices. The average domestic cotton price reached a peak of around ₹1 lakh per candy (₹280/kg) in FY23.

This price disparity between domestic and international markets had a notable impact on cotton exports. It has resulted in India witnessing its lowest cotton yarn exports in a decade. In FY23, India’s cotton yarn export volume stood at 664,000 tonnes, a considerable decline from the decade’s highest exports of 1,389,000 tonnes in FY22.