The estimated cotton production currently in India is 341.91 lakh bales. The estimated consumption is 311 lakh bales.

The performance of Indian cotton spinners moderated in the second quarter due to inflationary pressures and uncompetitive prices. However, absolute profits are projected to remain healthy, supported by a higher scale of operations.

For the first half of the financial year, inventory levels for most players have come down with the cotton stocks from the previous harvest season getting extinguished and sharp volatility in cotton prices affecting the buying power of spinners.And with higher raw material prices exerting cost pressures, operating margins remained flat.

In the second quarter revenue and margins dipped for Indian spinners amidst macro headwinds, while for the apparel segment revenue and margins remained flat, with recessionary conditions in key markets. Most players faced a decline in inventory levels in the second quarter after cotton stocks from the previous harvest season started to reduce and cotton prices saw a sharp volatility, resulting in players becoming cautious on buying. A recessionary environment in key export markets affected discretionary consumer spending leading to lower export sales. For the first half of the fiscal year, inventory levels for most players had reduced. This was in line with large retailers who focused on reducing inventory due to a weak demand scenario and recessionary pressures in key exporting regions.