With spinning mills in Tamil Nadu producing the largest quantity of yarn in
the country are faced with the chronic problem of price stability of cotton,
the Shipping Ministry has set up a Transhipment facility at V O Chidambaranar
Port for storing 250 container loads of imported cotton at any given time. The
facility will ensure timely supplies of raw materials to the spinning mills at
a reasonable cost
The imported cotton can be stored in the facility for thirty days free of
cost and the importer given the facility either to cater to consumption of
spinning mills in Tamil Nadu or elsewhere in the country or any other country
in the neighborhood depending on demand. VOC Port Tuticorin has also waived
certain charges for cotton shipment through the port.
The transhipment facility would bring about price stability in cotton
prices for the spinning mills largely depend on imported sources. With
transhipment facility in place, it will bring about price stability, as
imported cotton will be available on demand from the port to the hinterland,
where the mills are situated.
This would help to minimise losses due to price volatility and currency
fluctuations according to sources in South India Mills Association (SIMA), a
premier organisation of the textile industry in South India.
While the requirement of the textile mills in Tamil Nadue for cotton is
assessed at 120 lakhs bales annually, the state hardly grows five lakh bales
and rest used to be brought from Gujarat, Maharashtra, and Telangana. A
sizeable percentage of cotton is imported from African countries, United States
SIMA had tried out several steps to facilitate coastal movement of cotton
from Gujarat and Maharashtra to reduce freight costs. It has also impressed up
the Commerce Ministry to set up a Free Trade Zone facility at Tuticorin port.
Shipping Ministry, instead has faciliated the setting up of transhipment
facility with one of the container terminals of Tuticorin port.