Textile spinning mills in Tamil Nadu will source cotton from Gujarat by ship. Shipping companies have agreed to reduce costs. Shipping costs initially worked out to Rs 590 to Rs 700 per bale. With reduced rates, the consignments would start arriving in about a month. Cotton, as of now is almost entirely transported through road from Gujarat, the largest producer of the crop in the country, to Tamil Nadu. Road transportation charges are about Rs 850 per bale.

Tamil Nadu mills procure nearly 60 lakh bales of cotton from Gujarat. Transport of cotton by road became unviable due to the steep increase in freight charges. Spinning mills hope to reduce shipping costs to Rs 500 per bale from the next cotton season starting October. The aim is to bring down transportation costs to Rs 400 per bale. Tamil Nadu produces only five to six lakh bales of cotton per year against its annual requirement of 130 lakh bales. To fill the gap in supply, mills procure over 120 lakh bales of cotton from other states, mostly Gujarat and Maharashtra.

Textile mills in Gujarat, which have a capacity of 2.75 million spindles, consume only around 15 lakh bales of cotton a year out of the state’s annual production of over 100 lakh bales.