Yarn prices set to rise from Dec

Textile millers will raise yarn prices from December as cotton prices hit the highest mark in a decade in the global market.

Leaders of Bangladesh Textile Mills Association (BTMA) and Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) confirmed The Business Post about the development on Wednesday.

On August 21, BTMA, BGMEA and BKMEA set per kilogram 30 count yarn price at $4.20 if cotton price index in the international market stood 85-100. Price would be slashed if the index fell below 85, but if it rose above 100, the price would increase.

BTMA claimed that the price index stood over 100 for the last 15 days but they could not sell yarn at the fixed price, which forced them to increase prices.

“We talked to BGMEA and BKMEA leaders and assured them that yarn price would remain unchanged until November 30.

“But due to high rate of cotton prices, yarn prices will increase from December,” BTMA President Mohammad Ali Khokon told The Business Post.

“We will talk to BGMEA and BKMEA leaders again before raising the prices,” he added.

Apparel manufacturers welcomed the decision.

“Now we have around a month and a half in hand and it is enough to prepare. It will help us bargain with buyers for adjusting excess yarn price,” BKMEA Executive President Mohammad Hatem told The Business Post.

“We will propose a new price after reviewing the cotton price,” he said.

In a board meeting on October 12, BTMA analysed the global yarn price index and decided that it is impossible to sell yarn as per the negotiation price rate, which was decided in a meeting with apparel exporters on August 21.

The association nominated Khokon as a negotiator and gave him the authority to refix yarn prices after meeting with BGMEA and BKMEA. The BTMA board has taken four decisions on the high cotton price issue.

BTMA said that if any of its members did not issue PI and disagree to supply within 15 days after issuing PI, the customer may submit a written complaint to BTMA. The association will stop giving all kinds of facilities to that mill.

If any apparel exporter fails to open LC within 15 days after issuing PI, the BGMEA and BKMEA should hand out the same punishment.

The association will inform the cotton price situation every 15 days.