TN cotton mills want govt to relax cabotage rule

Cotton mills in Tamil Nadu have urged the state government to relax cabotage rules so that foreign flag vessels could be used for transport of cotton from Gujarat and Maharashtra to mills in the state. This would also reduce the freight charges.

“The reason why we are demanding this is cotton production in the state is only 500,000 to 600,000 bales as against the requirement of 12 million bales,” Southern India Mills Association (SIMA) chairman T Rajkumar said.

Cabotage refers to the transport of goods or passengers between two points in one country by a ship or aircraft registered in another country.

Though the Tamil Nadu government had announced establishment of Cotton Cultivation Mission with an allocation of Rs 50 crore and envisaged 2.5 million to 3 million bales, it would take time to implement it, he said.  According to him, the gap between the requirement and availability cannot be met.  

Tamil Nadu mills need this relaxation to sustain their competitiveness and survival. It would also create a win-win situation for all the stakeholders, he said.

Though cotton consumption has increased, the average month-end stock held by mills was lower at 3.9 million bales than the previous year’s 4.1 million bales, according to SIMA Review.

Yarn production during the year stood at 5,295 million kg, 8.79 per cent higher than previous year’s 4,868 million kg. Cotton, blended and non-cotton yarn stood at 3,923, 893 and 480 million kgs, all higher than previous production of 3,583, 828 and 457 million kgs respectively.

Deliveries (computed based on production and month end stock) of all yarn increased by 7.94 per cent and that of cotton, blended and non-cotton increased by 8.78, 6.12 and 4.68 per cent respectively over previous year deliveries, he was quoted in PTI.

Registration of cotton yarn exports during the year increased significantly to 1,415 million kgs, 32.6 per cent higher than previous year's 1,067 million kgs. Average month-end stock of all yarn stood at 194 million kgs, 14.84 per cent higher than previous year's 169 million kgs, he said.

Though there has been an increase in the registrations of cotton yarn exports, the average month-end stock during the year stood at 126 million kgs, 12.5 per cent higher than previous year's 112 million kgs. There was no no shortage of cotton yarn at any point of time during 2013-14 in the domestic market, Rajkumar noted.