The Indian ministry of shipping has facilitated setting up of a trans-shipment facility for imported cotton at Tuticorin port in Tamil Nadu for storing around 250 containers as the demand for the imported fibre is rising among smaller mills due to quality issues in cotton procured from domestic sources. The facility was inaugurated on August 4.

The new facility will offer small and medium category spinning mills direct and daily access to imported cotton, Southern India Mills' Association (SIMA) said in a press release. The cotton can be stored for up to 30 days for free of cost and another 60 days at a discounted charge with freedom to sell the cotton either in India or any other country depending on demand.

Only larger mills could import cotton earlier and derive benefits due to their financial strength and volume of import, according to SIMA.

"The trans-shipment facility would bring stability in cotton prices as imported cotton would be available at demand and also help the mills to prevent losses due to price volatility and also currency fluctuations," said SIMA chairman M Senthilkumar at the inaugural event.

The textile industry in Tamil Nadu accounts for one-third of cotton textile business and 47 per cent of spinning capacity in the country. Spinning mills in the state consume about 120 lakh bales (a bale is 170 kg) of cotton per year.

Mills in the state procure around 80 per cent of cotton from Gujarat, Maharashtra, Telangana and other states as Tamil Nadu’s annual cotton production stands at around 5 lakh bales. They also import around 15 per cent of the cotton from Africa, US and Australia.

SIMA succeeded in facilitating coastal movement of cotton between Gujarat and Tamil Nadu and also lobbied for creation of a free trade zone (FTZ) facility at Tuticorin. But as creation of an FTZ facility is time consuming, a trans-shipment facility was set up first. (DS)