Home ›› 31 May 2023 ›› Front
Bangladesh Textile Mills Association (BTMA) has urged woven and knit garment manufacturers to purchase yarn from the local market instead of depending on imports, apparently to avoid stockpiling of unsold yarn and save US dollars.
The textile millers also demanded to increase the individual borrowing limit for textile sector from the Export Development Fund (EDF) to $30 million from $20 million to help them deal with the problem brought forth by the unsold yarn.
Mohammad Ali Khokon, president of BTMA, raised the demand at a press conference at the BTMA office in Dhaka on Tuesday.
The textile industry insiders said that at present, the country’s apparel makers are receiving comparatively less export orders due to the ongoing global economic crisis, resulting in a decreased demand for yarn. Moreover, due to the recent price hike of gas up to 178 per cent for industry, they are losing their competiveness.
Sources said though Bangladesh’s textile sector has enough capacity to meet the yarn demand of knitwear sector, the apparel makers are importing yarn as it is cheaper than the price demanded by local millers. As a result, the country is facing a severe forex reserve crisis.
According to the BTMA, local textile millers exported 2,71,783 tonnes of yarn worth Tk 9,643 crore in the January-April period of this year. During the same period of the previous year, they exported 4,00,923 tonnes of yarn worth Tk 15,992 crore. Meanwhile, during this January-April period of the current year, Bangladesh imported 2,75,143 tonnes of yarn worth Tk 10,616 crore and during the same period of 2022, yarn import was 4,60,168 tonnes worth Tk 17,436 crore.
According to BTMA data, in April last, local textile millers sold per kg of yearn at $3.1, which was $4.85 in the same month of last year.
Zubair Spinning Mills Managing Director Md Abdullah Zubair told The Business Post, “Our monthly gas bill has increased from Tk 30 crore to Tk 68 crore after the recent price hike. As such, our annual gas bill will increase by at least Tk 350 crore which is more than our yearly profit. How we will survive in this situation?”
“Due to the gas price hike, our yarn and fabrics production costs have also increased, creating a negative impact on our export. Now we have unsold yarn and fabrics worth millions of dollars in our stocks,” he added.
Mosharaf Textile Chairman Md Mosharaf Hossain said, “As a result of the gas price hike, we were forced to increase the yarn price up to 30 per cent. Due to the high price of yearn, we ultimately lost competitiveness.”
“Meanwhile, instead of buying yarn from local market, the apparel manufacturers are importing yarn as the price is comparatively cheaper than the price we demand. It is deepening the ongoing foreign reserve crisis as we are losing huge foreign currency due to the import of yarn. Now most of the millers have a huge yarn stock in their warehouses,” he added.
At yesterday’s press conference, the BTMA president said the central bank reduced EDF from $7 billion to $4.5 billion and also cut individual borrowing limit for textile sector from $30 million to $20 million. “The move came at a time when we are in severe crisis. The textile millers are highly dependent on the fund. Although the central bank created another Tk 10,000 crore fund for exporters to purchase raw materials, it is not helping the exporters,” he added.
Khokon said fabrics and clothes worth millions of USD enter the country from neighbouring India and Pakistan every year through illegal channel. It is threating the local market-based textile millers.
“We are not only suffering from the illegal cross border trading, the government also is losing huge revenue. I urge the authorities concerned to take proper initiatives to protect illegal clothes and fabrics trading,” he added.
