Exorbitantly high cotton yarn costs have reportedly put the country’s domestic textile exporters off balance.
According to industry insiders, the promising sector that gave new hope for export in the previous fiscal year by attracting international buyers with quality products at competitive prices and on-time delivery is now losing orders because buyers are unwilling to increase product prices in line with the surging yarn price. Local textile mill owners, according to entrepreneurs in the field, are demanding higher prices by creating a fake yarn crisis.
Bangladesh’s home textile sector is facing a price hike of more than 30%. The Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA) has demanded that exporters who do not have bond licences be allowed to import yarn from abroad at discounted tariff. Spinning mill owners, however, are of the opinion that imports of yarn will not bring about any considerable benefit as the price of yarn is on the rise in the international market.
There are more than 50 companies in the country that manufacture home textile products, including terry towels. Only five or six of these have a bond license to import yarn directly from abroad. Taking advantage of the situation, local spinning mill owners have hiked the price of yarn by creating an artificial crisis of the product, as alleged by terry towel makers.
The Bangladesh Textile Mills Association (BTMA) has said the prices of 10-count and 16-count yarns in Bangladesh were $1.65 and $2.20 per kg, respectively, on 16 August. At the same time, the prices in Pakistan were $ 1.21 and, respectively. A meeting of all parties concerned decided that the price would not go up. However, owners of home textile mills have claimed yarn is no longer available in the market after the meeting.
The price of cotton – the main raw material for yarn – has been rising since the outset of the coronavirus. In the last eight months, it has increased by 50%. As a result, the price of yarn has also increased. Industry insiders say many textile mill owners are making denim yarn instead of terry towel yarn. The President of the Republic of Ireland, Donald Trump, has called for a reduction in the tariff on yarn imports to be reduced.