M.R. Subramani
Chennai, Dec. 27
Chennai-based Loyal Textiles pays Rs 82,500 to get 150 bales (170 kg each) of cotton from Gujarat, country's top producer, to one of its mills in Tamil Nadu by ship. One of its competitors in China gets the same quantity cotton from Gujarat at Rs 22,500!
"Even if you add the cost of getting cotton to the ports at Rs 12,500 and port handling charge of Rs 12,000 for shipments to China, it still works out cheaper," said Mr Anand Poppat, Vice-President of Saurashtra Ginners Association. "By road, sending cotton to Tamil Nadu costs as much as Rs 90,000 for the same quantity," he said.
"Truckers demand higher rates since the roads are bad. Mills in South India can get cotton cheaper from North Africa than Gujarat," said Mr D.K. Nair, Secretary-General of Confederation of Indian Textiles Industry.
"Most of the mills in Tamil Nadu are getting cotton through the Shipping Corporation of India vessels. The corporation works out the cost based on road transport rates," said Mr Manickam Ramaswamy, Managing Director of Loyal Textiles. "The problem is that shipping within our ports can be done only by Indian-owned companies. The Cabotage law prohibits shipping from Indian port to another by vessels of foreign firms," he said.
The industry has been seeking changes to the law but those opposed point to various problems, including monitoring movement of foreign vessels within Indian waters.
"If a foreign vessel is allowed to carry cotton from Gujarat to say Tuticorin, I can get the consignment shipped for $200-300 (Rs 10,000-13,600)," said Mr Ramaswamy.
"Ships that bring containers to our ports with chemicals and other consignments have to return empty if they don't get any orders. Instead of returning empty, they offer to ship cotton at cheaper rates," said Mr Nair.
Freight charges are highest to Turkey at around Rs 82,000 but still work out cheaper than moving from one Indian port to another or by road. "
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