Spinning mills, mostly in South India, have started to sign deals to import cotton following the Centre’s decision to allow the natural fibre’s shipments into the country duty free until September 30.
Mills in Tamil Nadu have started placing orders for imported cotton. As a plan, mills were placed orders for 3040 days of production with the view of rebalancing with domestic cotton,” said, Prabhu Dhamodharan, Convenor of Coimbatore based Indian Texpreneurs Federation (ITF).
The Central government allowed duty free import of cotton for a short period as domestic prices had exceeded ₹90,000 a candy (356 kg). Also as spinning mills were unable to get quality cotton, they had slowed down production in an effort to increase their inventories.
Deals to import cotton are being signed between ₹95,000 and ₹1,03,000 for a candy. “This will be the price at which cotton will land at Indian ports,” said, Anand Poppat, a Rajkot based trader in raw cotton, yarn and cotton waste. Prices of Shankar-6 cotton, the basis for exports, are currently quoting at ₹93,200-93,800 a candy.
“One of the biggest advantage now with imported cotton is, mills will get better awareness to the tune of 4-5% due to historic low level of quality in current domestic cotton,” Dhamodharan said. A huge problem with Indian cotton is its contamination. This year, according to spinners, it had resulted in comprehension for mills drop to 68.5 %. On the other hand, comprehension from imported cotton could be 75%