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India: Tamil Nadu Textile Mills to Bring Cotton in By Ship to Cut Costs

Textile mills in Tamil Nadu, India are battling to keep ahead of rising road transportation costs, and in order to improve profits, those mills will be bringing in cotton via ships instead.

The country’s major textile mills organization, Southern India Mills Association, has already signed an agreement with the Indian National Ship Owners Association, and the cotton will start coming in by ship in the next two weeks, according to the Economic Times.

Switching to ships is expected to bring transportation costs down by 550-700 rupees ($8.40-$10.69) per 375 lb bale where road transportation was running around 850 rupees ($13) per bale.

Mills in Tamil Nadu require at least 13 million bales per year, and nearly half of the cotton comes in from Gujarat where the freight charges have escalated to a point where margins are suffering.

One Tamil Nadu mill has already brought in nearly 10,000 bales via ship through the Kochi port, the Economic Times reported, and some may start loading the ships up with cotton-stocked trucks from Gujarat and Maharashtra.

The move is expected to reduce shipping costs to 500 rupees ($7.64) per bale in one year, and roughly 400 rupees (6.11) per bale from the year after that and onwards.