ITF To Buy 4 Lakh Bales Of Cotton Directly From Ginners

Market News

ITF To Buy 4 Lakh Bales Of Cotton Directly From Ginners

Indian Texpreneurs' Federation (ITF), which has partnered with cotton ginners, mainly in Telangana and Maharashtra, to directly procure 2 lakh bales during the 2016-17 season (October-September) for its member mills, is aiming to buy 4 lakh bales for the 2017-18 season.

"We have worked out a partnership model for buying cotton," said Prabhu Damodaran, convenor, ITF. Out of the 400 ITF member mills, 35 mills have joined hands to purchase cotton together. Cotton accounts for 60%-70% of the manufacturing costs of textile mills.

The 35 ITF member mills consume about 11 lakh bales of cotton per year. "We have standardised procedures and are able to maintain consistent quality by partnering with top quality ginners. Our realisation and profitability has gone up by about 2%," he said. Since the buying is done in bulk, mills are able to reduce transportation costs by Rs 2-3 per kg, Damodaran stated.

ITF has appointed authorised agents who do the field level coordination for buying cotton between October and January when arrivals peak. It has partnered with more than 50 ginners in Telangana, Maharashtra and Karnataka for bulk purchases. ITF facilitated a visit by 25 ginners from Telangana and Maharashtra to 12 member spinning units in the region. Tamil Nadu (TN) consumes 100-120 lakh bales of cotton per year. TN procures its requirements from other states as cotton production here is only around 5 lakh bales per year.

Cotton production is projected to to cross the 1 crore bales mark, a more than 10% increase, in Maharashtra for the 2017-18 season while output is forecast to jump 20% to around 90 lakh bales in Telangana.