Local spinners upset over rising cotton yarn import

Dhaka,  Monday,   2016-09-17
Published : 17 Sep 2016, 00:00:13

Local spinners upset over rising cotton yarn import

India 'dumping' surplus yarn at low prices
Monira Munni


Cotton yarn import has increased by more than 25 per cent during the first seven months in 2016, which local spinners termed a threat for the sub-sector of the country's primary textile industry.

Industry insiders apprehended that if the trend continues, it would badly affect the backward linkage industry that meets nearly 80 per cent requirement of the local knit sector.

Bangladesh imported 207,644 tonnes of cotton yarn from January to July this year. It imported 165,076 tonnes of cotton yarn during the same period of 2015, according to the data of Bangladesh Textile Mills Association (BTMA).

In 2015, a total of 295,330 tonnes of cotton yarn was imported, which was 280,283 tonnes in 2014, BTMA data showed.

Major portion of the yarn has been imported from the neighbouring India. In recent times yarn is also being imported from Indonesia, industry insiders said.

"This is alarming for the local spinning industry that has the capacity to meet the knit sector's requirements," said former BTMA president Jahangir Alamin.

A few grades of yarn, used for producing high value added products, are not produced here, but it is insignificant, he added.

The local millers can meet 35 to 40 per cent of the woven sector's fabric requirement, and the rest is met through import, he explained.

Some 430 local spinning mills supply more than 80 per cent of the raw material for the country's knitwear sector and 35 to 40 per cent of the woven sector, according to BTMA.

About $6.0 billion have been invested in the textile sector while spinning mills account for 60 per cent of the investment.  

BTMA vice president Fazlul Hoque said if such trend continues, profitability of the spinners will gradually decline and the industry will turn into a sick one.

The impact on the export loss is not visible, but this might happen very soon. The retention of foreign exchange by using backward integration is falling and will fall drastically in the near future, he feared.

Some of the textile millers alleged that in absence of effective government monitoring, some unscrupulous businessmen are importing lower count of yarn with declarations of high count and low volume though import is much higher.

Regarding lower rate of imported yarn, some spinners opined that India's export to China has reduced substantially, and hence the former has a significant volume of surplus yarn to export at very low prices.

In the last one year the Indian currency has been devalued by 9.0 per cent, which is making Indian products cheaper in dollar, they added.

Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said, "In free market economy one can buy his/her required products from any market."

Price is one of the main reasons behind the increasing trend of cotton yarn import, as the price of the raw material is higher in the local market, he explained.

Moreover, buyers are placing demands for some grades of cotton yarn, which are not so much available in the local market. Bangladesh is still lagging behind in developing such varieties, he noted.

M A Matin, former president of BTMA, said it is true that local spinners are yet to produce some of the varieties that buyers ask for, especially in denim segment.

There are demands for local denim products and orders are also coming. But local spinners cannot supply all the required yarns. Foreign buyers are placing orders for ring-ended yarn, where the country's capacity is relatively low, he added.

Admitting that such rising trend of cotton yarn import might affect the local backward linkage industry, the BKMEA leaders suggested the spinners to think why garment exporters are importing such raw materials though they receive cash support from the government for using locally-produced raw materials.

The BTMA leaders requested the government to increase cash support to retain their competitiveness.

    munni_fe@yahoo.com
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