Agri Business

Cotton procurement: Youth brigade joins hands to buy smart

L N Revathy Coimbatore | Updated on January 22, 2018

Around 43 members of the Indian Texpreneurs’ Federation have joined hands to work out a system for “smart/ intelligent buying of cotton”.

These members, according to ITF Secretary Prabhu Damodaran are seeking technical and commercial advice from a leading cotton trader Deven Shah, Partner, Bhaidas Cotton LLP, Mumbai.

Speaking to BusinessLine from Mumbai, Shah conceded that in a new trend for the mill sector here, the younger generation is keen to share information and understand the business better.

“I have been in this business for close to two decades now and am an agent for foreign shippers. ITF sources have expressed their intent to seek my expertise in selection of the right cotton variety, in understanding the contract details better, and in availing of credit,” Shah said.

Prabhu meanwhile pointed out that cotton prices had started to firm up, rising by almost Rs 1,000/candy in the last 25 days or so, which “is quite unusual during this time of the year.”

“Though the domestically available fibre is still cheaper than imported cotton, market sources say that the prices could move north in the coming days/ weeks. If this happens, import of the fibre would be better as we would be able to buy the cotton on credit, notwithstanding lower trash content (in the imported variety) and better realisation on the machine,” the ITF Secretary explained, adding “MNCs and big corporates have started buying huge volumes of Indian cotton. We will face the heat after March, as quality cotton will become scarce.”

“To tide over such issues and more, we mooted this smart (cotton) buying proposal,” he reiterated.

A closer look at the scenario points to the fact that import shipments start from March and go up to June. Shah, it is learnt, is said to have told ITF members that imports could be booked “at the same price from January till June from West African countries to ensure continuous supply of the fibre at a lower rate of around 2.5 per cent per annum.”

“It would be prudent to import cotton between March and June as it takes about 75 days from the time of entering into an import contract to finally receiving the goods at Tuticorin port, buyers should plan the import volumes ahead of time,” he said.

ITF members in the meantime are studying intelligent buying options, the ITF Secretary said.

Published on December 19, 2015

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