Home textile exporters hit hard by yarn crunch

Despite having huge numbers of orders from abroad, home textile exporters in the country are now passing through a hard time as local yarn manufacturers have failed to meet their demand.

At the same time, these exporters also cannot avail duty-free import of yarn due to the absence of bond licenses and an existing bar on partial shipment through land ports.

For this reason, the Bangladesh Terry Towel & Linen Exporters Association (BTTLMEA), an apex body of the home textile sector, has been working to seek government intervention to resolve the issue.

“We spoke to yarn manufacturer and they said that they will not unable to meet our demand. On the other hand, only four of our members have bond licenses. Then, how will we meet our demand?” BTTLMEA Chairman Shahadat Hossain Sohel told The Business Post.

BTTLMEA has already drafted a letter to urge the commerce minister to allow duty-free or approve a nominal duty for yarn import.

“We are drafting a letter, which will be sent to the Commerce Minister within two or three days, to press home our demand to facilitate us with duty-free or nominal duty for yarn import. When local manufacturers will able to meet our demand, the government can withdrawal this facility,” he added.

According to the BTTLMEA, the country’s home textiles sector uses 10s (single) and 16s count yarn, of which 80 per cent were being supplied by local manufacturers. However, due to a recent rise in denim export, the demand for single yarn has increased.

From the last fiscal, the export performance of the home textile sector grew significantly and now, local yarn manufacturers can only meet 50 per cent of the sector’s total demand.

On the other hand, the government has imposed 31 per cent import duty for mixed yarn and 37 per cent duty for cotton yarn to help local yarn manufacturers grow.

According to the BTTLMEA, only four mills out of its 113 members have bond licenses.

“If the government allows duty-free or nominal duty import, we will import yarn from Pakistan at a reasonable price. This will help us make more profit from higher export earnings,” said Sohel.

In FY2020- 21, export earnings from the home textile sector were at $1.13 billion with a growth rate of 49.17 per cent during the Covid-19 period. The earnings were at $559 million in the same period a year ago, according to the Export Promotion Bureau.

Exporters claimed that Bangladesh has a huge chance to expand its market as the European Parliament will withdraw Pakistan’s GSP+ status over abuse of the latter’s blasphemy laws.