In a major relief to spinning mills in the southern part of the country, the Union shipping ministry has allowed the mills to import cotton from international markets through the Tuticorin port. Since the creation of free trade zone (FTZ) facilities is a time-consuming process, the ministry has said that it will be better to go ahead with a transhipment facility. Accordingly, the international traders and the industry preferred Tuticorin port, though the facilities are available at Cochin and Chennai ports. The Tuticorin port has been provided with the transhipment facility to start with for storing around 250 containers of cotton for a period up to 30 days at free of cost and another 60 days at a discount charge with freedom to sell the cotton either in India or any other country depending upon the demand, a senior official of Southern Mills India Association (SIMA) said.
During the past two years, demand for imported cotton has increased due to quality issues in the domestic production. Only larger mills could import cotton and take advantage due to L/C conditions, financial strength and volume of import. But the longer lead time and currency fluctuations were affecting the mills, said M Senthilkumar, chairman of SIMA.
The association has been making several attempts to facilitate coastal movement of cotton to reduce the transport cost and also to create FTZ facility at Tuticorin and made representations to the prime minister’s office and the shipping ministry through the ministry of textiles (MoT). Following directions from the Centre, SIMA, Indian National Ship Owners’ Association (INSA) and Tuticorin port authorities had made the coastal movement of cotton between Gujarat and Tamil Nadu a reality and currently transport around 10 lakh bales of cotton per year.
The Tamil Nadu textile industry accounts for one-third of cotton textile business and 47% of spinning capacity in the country. The spinning mills in Tamil Nadu annually need around 120 lakh bales of cotton (170 kg a bale). But, Tamil Nadu produces only around 5 lakh bales of cotton per year and therefore, around 80% of the cotton is procured from other states such as Gujarat, Maharashtra and Telengana by spending up to `6 per kg of cotton and also importing around 15% of the raw material from the African countries, US and Australia.