The sharp fall in the rupee since the start of this year has put a break on cotton imports. The rupee that had appreciated nearly one per cent in December turned its course and has depreciated by 2.8 per cent so far in January, ending the financial viability of imported cotton, which was around three per cent cheaper in terms of landed prices. In fact, with a recovery in world cotton prices this month, the landed price of imported cotton is costlier by Rs 1000 rupees per candy or at a two to three per cent premium over domestic prices.

Meanwhile mills in southern India have resumed purchases of raw material from Gujarat after getting a quality assurance.

In December, mills in South India had temporarily suspended purchasing cotton from Gujarat due to increased instances of mixing cotton waste with cotton. Some mills in the coastal region resorted to imports from Ghana and Sudan, among others.

India is the world's top producer and the second largest exporter of cotton.

The sharp rise in domestic prices in November-December had forced Indian textile mills to source cheaper cotton available in west African countries.But now most mills in south India have resumed their purchases from Gujarat.