Duty on waste cotton soon to check export

The government is set to contain waste cotton export through imposing duty on the item and raising its export price to ensure supply of adequate raw material for terry towel and home textiles industry, officials said Thursday. The Ministry of Commerce (MoC) has recently decided to impose 25 per cent duty on export of waste cotton, and raise its export price to $4.00 per kilogramme from the current $1.60 per kg. A joint secretary-level meeting at the MoC took the decision two weeks back. The decision would be implemented through issuing a statutory regulatory order (SRO) after the minister's approval. Local manufacturers of terry towel and home textiles are facing a crisis of raw materials amid volatility in global cotton market, and due to export of cotton waste at 'low' price, stakeholders said. Cotton waste is a residue of virgin cotton, which the spinning mills use for producing thread. Mixing up of waste cotton and virgin cotton is necessary to produce low-priced terry towel and home textile for the local and foreign markets. Spinners, having rotor machines, use the cotton waste themselves to produce yarn for terry towel and home textiles industry. Spinners, having no rotor machine, sell the cotton waste to traders, who export it to neighbouring India, sources said. Some 86 terry towel mills and over 10 home textile mills have been facing crisis of raw materials during the last seven to eight months, leading to reduction of their production by half. Besides, yarn price has increased in some cases by over 150 per cent during the period. President of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association M Anisuzzaman told the FE that Bangladesh is a cotton importing country, and the imported cotton should be value added before export. "When waste cotton is directly exported, it does not add any value. But if we can export it by manufacturing terry towel and home textiles, we can earn a huge amount of foreign currency," he said. "During the last seven to months we have been running from one desk to another in the MoC. However, we haven't seen any effective development regarding controlling of waste cotton export. On the other hand, the millers are facing a serious setback," said Mr Anisuzzaman. He alleged that the government in last fiscal set a single harmonised system code (HS code) number for garment cutting and waste cotton. Now some people are exporting waste cotton under the veil of garment cutting. Local terry towel mills need some 146.0 million kgs of yarn per year. The mills exported goods worth $157 million last fiscal, against $132 million of the previous fiscal. President of Bangladesh Textile Mill Owners' Association Mohammad Afzal Hossain told the FE that there is a huge shortage of waste cotton in the market, and it causes a serious problem in production of home textiles. "Millers, producing home textiles, are struggling to survive in this situation, as most of their capacities remain unused," he added.