Yarn price won’t go over pro forma invoice

Local yarn manufacturers have decided to check sudden unusual price hikes of yarn in the domestic market and committed not to increase yarn prices quoted in the pro forma invoices issued on August 10 at the latest.

The assurance came while the leaders of Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Knitwear Manufacturers and Exporters Association and Bangladesh Terry Towel and Linen Manufacturers and Exporters Association held a meeting with Bangladesh Textile Mills Association on Tuesday night.

Local garment exporters are feeling the pinch of a sudden unusual rise in yarn prices in the local and international markets, a development that is threatening to derail the recovery of the apparel shipment from the pandemic-induced slowdown.

Against such a backdrop, the entrepreneurs of the ready-made garment industry and the textile sector held a meeting to decide that the price of yarn will not be increased now and they also have agreed to find a way out of the complexities caused by the continuous rise in yarn prices.

After the meeting, they have agreed to find a way out of the complexities caused by the continuous rise in yarn prices.

BGMEA president Faruque Hassan, BKMEA president A.K.M. Salim Osman, MP, first vice president Mohammad Hatem, BTTLMEA chairman M Shahadat Hossain and BTMA president Mohammad Ali Khokon attended the meeting. Former BGMEA president Kutubuddin Ahmed, former FBCCI president A.K. Azad, former BTMA presidents A. Matin Chowdhury and Tapan Chowdhury were also present at the meeting.

BTMA President Mohammad Ali Khokon also assured that yarn manufacturers would keep PI valid for 15 days which they were keeping in a very short time.

“Such a short time limit was not sufficient for taking business from buyers. PI is an estimated invoice sent by a seller to a buyer in advance of a shipment or delivery of goods,” he added.

They also agreed to hold another meeting next Monday to have discussion over reducing yarn price.

BGMEA President Faruque Hassan demanded that the 30s yarn price goes down immediately keeping it consistent with the international market to save the industry and keep the industry’s competitiveness and survive in this crucial time of business.

It was decided in the meeting that an arbitration cell will be revived. The cell will consist of BGMEA, BKMEA, BTTLMEA and BTMA representatives to resolve all PI related and other issues on a fortnightly basis.

Earlier, the apparel exporters expressed their worry over the continuous yarn price hike in the local market. The unusual hike in yarn price is impacting the competitiveness of the RMG industry which is already passing through a difficult time due to increase in production cost and fall in apparel prices.

The price of yarn has increased, as the price of cotton, the main raw material for readymade garments, the main export sector of the country, has also gone up over the last eight months globally.

Bangladesh RMG exporters manufacture their 75 per cent products on a cotton basis and during the Covid-19 period, its price went too high due to low supply in the global market.

However, the RMG sector meets their cotton demand by import while around 60-65 per cent spent on fabrics of the total cost of production.

RMG exporters claimed that local manufacturers increase the 30s (single) yarn price by around 60 per cent which increases their goods price by 40 to 45 per cent.

High cost of production in the ongoing Covid-19 pandemic situation, Bangladesh cannot be a competitor with their competitor. At present, most of the exporters export their goods with minimum margin or cost of production, claimed BGMEA and BKMEA.