BGMEA for partial shipment facility

Leaders of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) has urged the government to allow partial shipment for importing raw materials through land ports to enable the sector meet its export deadlines.

In a letter to Commerce Minister Tipu Munshi on Saturday, BGMEA President Faruque Hassan said garments manufacturers had increased imports of raw materials, especially yarn and fabrics, from India due to high yarn price in the domestic market.

However, an existing ban on partial shipment for importing raw materials through land ports had been causing delays in deliveries and increasing their lead time, the letter said.

The congestion at Benapole land port has become a regular issue which has been causing financial losses to factories, Faruque Hassan wrote in the letter.

The BGMEA placed three demands through the letter.

Along with Benapole, the government should allow import of raw materials for RMG and textiles through Sona Masjid, Bhomra and others authorized land port, the letter said.

“We also recommend increasing adequate manpower and warehouse facilities at Benapole to ease the congestion at the port,” the letter added.

The BGMEA letter comes as export-oriented apparel makers face great difficulties in importing raw materials from India due to the suspension of fractional shipment facilities through land ports alongside the global container crisis.

The crisis comes at a time when the sector is now trying to recover from the losses caused by the Covid-induced lockdowns amid the pandemic.

Talking to The Business Post, RMG owners said due to a bar on partial shipment facilities by the National Board of Revenue (NBR) since FY2005-06, together with high rental costs of containers and unusual delays at the Benapole-Bangaon land Port, have increased their lead time in meeting export deadlines.

Due to this crisis, it takes nearly 25 days for a shipment from India to arrive in Bangladesh through the Benapole route, compared to a maximum of 19 days during pre-Covid period.

Exporters claimed that if partial shipment was allowed, they would have been able to receive their raw materials from India within a week.

“If the government had lifted the bar on partial shipment facilities through land borders, we would have been able to save at least $0.05 to $0.07 per kilogramme of yarn and receive our materials quickly.

At the same time, the government should allow the railway to bring raw materials from India to ease the pressure on the land ports,” Fazlee Shamim Ehsan, vice president of Bangladesh Knitwear Manufacturer and Exporters Association (BKMEA), told The Business Post.

Around 75 per cent of Bangladesh’s apparel manufacturing is based on cotton and around 99 per cent of required cotton is met through imports.

In the knitwear sector, around 80 per cent of yarn demand was being met through domestic sources, which has become much costlier since last September.

During pre-Covid-19 period, 30s (single) yarn per kilogramme was around $2.30, but that has risen to $4.30 at domestic mills due to global supply crisis, according to the BKMEA.

With high prices and low supply in the domestic market, the country’s exporters turned to India to meet their demand with lower costs.

The RMG owners said Indian exporters often fail to deliver shipment on time, and in many cases the shipments arrive around 10 days late.

At the same time, the rental costs of shipping containers have gone up as India has been hit hard by a global container crisis since the beginning of the coronavirus pandemic.