A friend of mine called up and said as per his estimates Ambika cotton consumption is 10% of total production of Pima and Giza variety. I did my calculation independently and came to about same conclusion.
It’s quite possible that there is some error in the way I am looking at the data.
If not then we should worry about 1) opportunity size and possible growth going forward [Am looking beyond 30K spindles capacity expansion] 2) Availability of cotton itself owing to severe drought in California [it produces > 90% of US Pima cotton production]. In 2015 area under Pima has declined from 2 to 1 Lakh acre [read this article http://www.nytimes.com/2015/08/08/business/a-once-flourishing-pima-cotton-industry-withers-in-an-arid-california.html?_r=1] . Even in Egypt area under Giza cotton is declining due to removal of subsidies on cotton. [http://english.ahram.org.eg/NewsContent/3/12/119530/Business/Economy/New-subsidy-cut-may-be-the-end-of-Egyptian-Cotton.aspx]
Here are my calculations:
For USA
So US is around 13crs Kg . See this link for US area under PIMA cotton http://www.supima.com/view-reports/acreage-estimate/ . Pounds per acre is from NYT article referred above.
Egypt produced 370,000 bales during 2014 . One bale = 225kgs. This amount to 8.3crs kgs
[see this link http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Cotton%20and%20Products%20Annual_Cairo_Egypt_3-30-2014.pdf] 90% of Egypt cotton is extra long and long staple variety.
So Pima + Giza amounts to 21crs kg for 2014. As per Ambika website cotton consumption for 2014 was 1.89 cr kg and for 2015 2.23cr kg. So as per my estimates Ambika is already consuming around 10% of global production. Atleast for next 2-3 yrs it seems global production is not going to increase. So to repeat 1) Opportunity size ??? 2) Availability of cotton ???