Cotton consumption by mills has been on a steady increase for the last three years despite the so-called slump in demand for cotton cloth and garments claimed by the industry.

Monthly average of cotton consumption by mills increased to 12.33 lakh bales in the current season (Oct 97 to Sept 98) from last year's 12.26 lakh bales. The average monthly cotton consumption by mills was 11.25 lakh bales in 1995-96.

According to the data available mills have consumed a total of 98.68 lakh bales in the first eight months (Oct 1997 to May 1998) of the current cotton year. Total consumption of cotton in the similar period of previous two years was 98.09 lakh bales and 89.98 lakh bales while it was 138.29 lakh bales and 149.96 lakh bales for the full years of 1995-96 and 1996-97 respectively.

Earlier during the year the textile industry complained ofsevere liquidity crunch, forcing it to drastically reduce cotton offtake which is evident from the fact that the offtake has been comparatively lower since January this year.

During the first five months of the current calender year (January to May 98) the total mill consumption has reduced by 3.15 lakh bales to 59.85 lakh bales which was higher at 62.90 lakh bales last year.

According to market sources lifting of cotton yarn by the powerloom sector for the conversion into fabrics also has considerably slowed down. Moreover there has been a structural change in the pattern of yarn production in that the organised mill sector is going in for the purchase of only coarser and medium varieties of cotton in order to realise better prices from cloth sales.