Colombo To Be Promoted As New Cotton Hub Of Asia

Monday, 17 October 2016 09:50
Colombo To Be Promoted As New Cotton Hub Of Asia

The Hindu reports that the textile mills in the southern States are expected to import more cotton this year (October 2016 to September 2017). They are looking at promoting Colombo as a hub where international sellers and shippers can stock cotton and supply to the mills in south India and also to buyers in other Asian countries.

Such a project is expected to bring down the transport cost substantially for the mills in the South compared to the cost incurred now for moving home-grown cotton from Gujarat or Maharashtra to south India. It will bring stability to cotton prices in India, say industry sources here. Textile mills in Tamil Nadu now buy international cotton based on specifications quoted to them. If cotton is stocked in Colombo, they can have a look at the cotton too. A seven-member delegation from Southern India Mills’ Association visited Sri Lanka recently and had discussions with Sri Lanka Ports Authority officials.

P. Chinnasamy and A. Ilavarasu, who were part of the delegation, told The Hindu on Saturday that the members saw the facilities at Colombo port, the Free Trade Zone warehouse, and logistics facilities. “We have sought 30 days storage of containers with free demurrage,” Mr. Chinnasamy said. Cotton not only from Africa but from other countries can be stored at the Colombo port to be shipped to textile mills in south India and other south Asian countries too, based on demand. “We have invited a delegation to visit Coimbatore to have a meeting with the textile mills and cotton traders and sellers. We hope the facility will be operational by December,” he said.

According to Mr. Ilavarasu, about 50 per cent of the country’s spinning capacity is in south India. “But, logistics cost is against us.” Now, shippers bring the cotton to Malaysia and supply to the buyers in south Asian countries. The transit time is three to four months. This will be decreased if cotton is stocked in Colombo.

Traders also point out that cotton merchants need the flexibility of selling to Indian and other markets throughout the year. Countries such as Bangladesh and Vietnam buy imported cotton throughout the year. The advantage of Colombo is the connectivity to Karachi, Chittagong, Singapore and Vietnam.