BTMA urges exporters to source yarn locally

Leaders of the country's primary textile mills requested the ready-made garment (RMG) exporters on Tuesday to source yarn from local market through opening back-to-back letters of credit (L/Cs) to help the backward linkage industry, which has unsold stock of yearn, and to save foreign currency.
"The textile mills, both export-oriented and supplying yarn to the local market, are in dire situation, as these have stockpile of unsold yarn," Bangladesh Textile Mills Association (BTMA) President Mohammad Ali Khokon said.
Yarn import by the exporters has increased in recent months compared to local procurement, while local market is flooded with illegally imported fabric and garment items from the neighbouring countries of Pakistan and India, he explained.
He was speaking at a press conference at the trade-body's office in the city on the current situation of the textile sector that is facing a difficult time due to high dollar price and gas supply crisis along with stockpiling of unsold yarn in the mills.
According to BTMA data, the local millers sold 0.271 million tonnes of yarn to the RMG exporters, while 0.275 million tonnes of yarn were imported during January-April period of 2023.
"Competitiveness of the local mills has declined, as yarn production cost has gone up by Tk 35-40 per kg due to the latest gas price hike, while the mills cannot utilise half of their production capacity because of the gas crisis. As a result, their production cost has risen further," Mr Khokon also said.
He requested the woven and knitwear garment exporters to source a portion of their required yarn from the local millers through back-to-back L/Cs to help the backward linkage industry sustain during its crisis period.
The BTMA leader also demanded frequent raids in the areas like Narayanganj, Araihazar, Rupganj, Madhabdi, Baburhaat, Narsingdi, Belkuchi and Sirajganj, alleging that yarn, fabric and dress materials, imported under bonded warehouse facility, are illegally sold at cheaper rates in these areas.
As a result, some mills are closed - as they have failed to compete with imported yarn and fabric, while many mills might also close down in near future, he added.
Khorshed Alam, chairman of Little Group, said he has already shut down one of his units, as sale of yarn has dropped in the local market because of illegal import of yarn and garment items from India and Pakistan.
Another of his units is able to use only 30 per cent of its capacity because of low gas pressure.
The millers are not getting gas with adequate pressure although the government doubled gas price last year, the millers said, demanding uninterrupted gas supply.
The BTMA president also urged the concerned to refrain from collecting additional security money on enhanced gas tariff as well as to review gas price.
He requested the government for continuation of the Export Development Fund (EDF) facility, alleging that loan distribution from the fund has recently become irregular while the limit of the fund for textile millers has been reduced to US$20 million from $30 million.
The BTMA's other demands included providing block account facility to the millers until June next year.

munni_fe@yahoo.com