Global yarn price hike hits local knit industry
Wednesday, 28 April 2010
FE Report
The country's knit manufacturers are facing hard time as the prices of yarn have doubled over past one year both in international and domestic market.
As of Monday, the cotton yarn price stood at US$ 4.10 a kilogramme (kg) in the international market and $4.80 a kg in the domestic market. The prices of yarn was around $2.0 a kg a year back.
The global market started getting volatile following poor harvest in major cotton growing countries including Ukraine and the USA this year.
The prices of yarns started to rise in the domestic market soon after imposition of a ban on the export of yarn by India recently.
Bangladesh's spinners manufacture yarn after importing raw cotton from different CIS (Commonwealth of Independent States) countries, Turkey and the USA. A large number of knit makers also import the same from India.
The knit makers said that the buyers were reluctant to raise the prices of finished products amid high price of the raw materials.
Ashraful Hassan, managing director of Grameen Knit told the FE: "I never faced such a situation earlier."
"We're not signing any deal with the buyers right this moment as we cannot predict about the future prices of cotton yarn," Mr Ashraf added.
He also said his company faced a loss in the quarter ending March this year following unexpected rise of yarns.
The country's knit products are contributing largely in Bangladesh's total apparel export exceeding woven sub sector in the last fiscal. The main destinations of Bangladesh's knit products are Europe and the USA.
Md Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA): "We're really frustrated over the fast upward prices of yarn as the industry will face a negative impact because of this."
He alleged that spinners have been hoarding cotton yarn in view of short supply amid speculation that the prices of yarn may go up further.
Mr Fazlul who is the head of a group consisting 1400 knit factories said: "If this rising trend continues, many factories will shut their factories."
Mr Fazlul said this is a really big threat to the industry at a time when it is gaining pace after a slump hit by global recession.
Bangladesh's sub sector primarily grew in Narayanganj by manufacturing low-end products in 1980s but later it spread fast in major exporting zones.
The country's knit manufacturers are facing hard time as the prices of yarn have doubled over past one year both in international and domestic market.
As of Monday, the cotton yarn price stood at US$ 4.10 a kilogramme (kg) in the international market and $4.80 a kg in the domestic market. The prices of yarn was around $2.0 a kg a year back.
The global market started getting volatile following poor harvest in major cotton growing countries including Ukraine and the USA this year.
The prices of yarns started to rise in the domestic market soon after imposition of a ban on the export of yarn by India recently.
Bangladesh's spinners manufacture yarn after importing raw cotton from different CIS (Commonwealth of Independent States) countries, Turkey and the USA. A large number of knit makers also import the same from India.
The knit makers said that the buyers were reluctant to raise the prices of finished products amid high price of the raw materials.
Ashraful Hassan, managing director of Grameen Knit told the FE: "I never faced such a situation earlier."
"We're not signing any deal with the buyers right this moment as we cannot predict about the future prices of cotton yarn," Mr Ashraf added.
He also said his company faced a loss in the quarter ending March this year following unexpected rise of yarns.
The country's knit products are contributing largely in Bangladesh's total apparel export exceeding woven sub sector in the last fiscal. The main destinations of Bangladesh's knit products are Europe and the USA.
Md Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA): "We're really frustrated over the fast upward prices of yarn as the industry will face a negative impact because of this."
He alleged that spinners have been hoarding cotton yarn in view of short supply amid speculation that the prices of yarn may go up further.
Mr Fazlul who is the head of a group consisting 1400 knit factories said: "If this rising trend continues, many factories will shut their factories."
Mr Fazlul said this is a really big threat to the industry at a time when it is gaining pace after a slump hit by global recession.
Bangladesh's sub sector primarily grew in Narayanganj by manufacturing low-end products in 1980s but later it spread fast in major exporting zones.