MoU Between SIMA And INSA For Transporting Cotton

SIMASouthern India Mills’ Association (SIMA) has signed a memorandum of understanding (MOU) with Indian National Ship Owners’ Association (INSA) for transporting cotton through ships. Textile spinning mills in Tamil Nadu to start transport cotton from Gujarat to their units by ship as the shipping companies have agreed to reduce cost, SIMA chairman, T Rajkumar, said.

Tamil Nadu produces only 5 to 6 lakh bales of cotton per year against its annual requirement of 130 lakh bales. To fill the gap in supply, TN mills procure over 120 lakh bales of cotton from other states, mostly from Gujarat and Maharashtra.

The industry officials said that the mills would start sending their consignments using ships in about a month’s time. Shipping costs would initially work out to Rs. 590 to 700 per bale (a bale is 170kg). Cotton is now being almost entirely transported through road from Gujarat, the largest producer of the crop in the country.

SIMA secretary general K Selvaraju said that they hope to reduce shipping costs to 500 per bale from the next (cotton) season starting from October. Their aim is to bring down transportation cost to 400 per bale. The centre is also working on an initiative to promote coastal shipping where it plans to offer incentives, which will reduce transportation costs by 40 per bale if incentives are offered.

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