The Cotton Association of India has estimated cotton crop output to be lower by five per cent this year at 354 lakh bales against 373 lakh bales last year.
In December, the association estimated cotton output at 353.25 lakh bales.
Arrivals as of January-end were at 177 lakh bales, against 102.50 lakh bales in December.
The average daily arrivals continue at an impressive pace of over 2,50,000 bales, said the CAI.
Despite the reduction in cotton acreage, the prospects of cotton crop look promising this year.
The demand for cotton from the mill sector continues to remain good, it said.
The total cotton supply will touch 419 lakh bales with imports of 12 lakh bales and opening stock of 53 lakh bales.
On the demand side, the domestic consumption is estimated lower at 271 lakh bales (excluding exports).
The mill demand is estimated at 235 lakh bales, while that of small-scale mills and non-mill is 20 lakh bales and 16 lakh bales, respectively.
The industry will be left with a surplus of 177 lakh bales, said the CAI.
Total demand last year was 382 lakh bales, including exports of 127 lakh bales.
The Cotton Advisory Board, in its second estimate in January, projected cotton output of 330 lakh bales, due to reports of bollworm infesting some of the BT cotton crop across the country, but largely in few regions of Maharashtra and Rajasthan.