Indian ban on cotton export hits textile sector
Saturday, 24 April 2010
FE Report
The country's textile and knitwear sector faces a fresh blow as India has imposed a sudden ban on cotton export through Benapole land port.
The Indian textile ministry issued a notice last week to restrict the export of cotton, which will remain effective until further notice, Customs officials said.
Fazlul Hoque, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told the FE that the price of cotton traded at more than 90 cents per pound recently in the international market, up from 80 cents per pound.
"Already the production cost of yarn has increased in the local market because of price hike in cotton prices in the international market and power shortage. It will increase further because of the Indian ban on cotton export."
"It's a big blow to the country's knitwear sector. Yarn prices are rising at an alarming rate and it is happening at a time when we are trying to recover from months of negative growth," Hoque said.
Hoque said increased yarn prices will affect profit margins of knitwear manufacturers, particularly the signs look ominous for small factories, which will be severely pummelled by soaring rates.
"Some 200-300 factories will be the hardest hit. Many companies will lose a big chunk of their orders because they cannot compete in prices as demanded by western buyers," he said.
He sought the government's intervention to curb price hike and demanded daily monitoring of local and international yarn rates in an effort to protect the industry.
Bangladesh Textile Mills Association secretary general Tawfique Hasan said, "The import of cotton from India accounts around 30 per cent of the total import. Now with the Indian restriction we will have to look for alternative sources."
"We are now able to utilise 40 to 45 per cent capacity of 353 mills because of gas and power shortage."
The cost of importing cotton from neighbouring India was lower. It will go up if it is imported from other countries like Uzbekistan, Pakistan, Indonesia and CIS countries. he said.
Bangladesh Garment Manufacturers and Exporters Association acting president Md Siddiqur Rahman said, 'It's a big threat to the apparel sector as all the components are related to one another and cotton is most important of them."
He said: "Cotton price is an import issue for the survival of the apparel sector so the government should immediately pay attention to the matter."
The country's textile and knitwear sector faces a fresh blow as India has imposed a sudden ban on cotton export through Benapole land port.
The Indian textile ministry issued a notice last week to restrict the export of cotton, which will remain effective until further notice, Customs officials said.
Fazlul Hoque, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told the FE that the price of cotton traded at more than 90 cents per pound recently in the international market, up from 80 cents per pound.
"Already the production cost of yarn has increased in the local market because of price hike in cotton prices in the international market and power shortage. It will increase further because of the Indian ban on cotton export."
"It's a big blow to the country's knitwear sector. Yarn prices are rising at an alarming rate and it is happening at a time when we are trying to recover from months of negative growth," Hoque said.
Hoque said increased yarn prices will affect profit margins of knitwear manufacturers, particularly the signs look ominous for small factories, which will be severely pummelled by soaring rates.
"Some 200-300 factories will be the hardest hit. Many companies will lose a big chunk of their orders because they cannot compete in prices as demanded by western buyers," he said.
He sought the government's intervention to curb price hike and demanded daily monitoring of local and international yarn rates in an effort to protect the industry.
Bangladesh Textile Mills Association secretary general Tawfique Hasan said, "The import of cotton from India accounts around 30 per cent of the total import. Now with the Indian restriction we will have to look for alternative sources."
"We are now able to utilise 40 to 45 per cent capacity of 353 mills because of gas and power shortage."
The cost of importing cotton from neighbouring India was lower. It will go up if it is imported from other countries like Uzbekistan, Pakistan, Indonesia and CIS countries. he said.
Bangladesh Garment Manufacturers and Exporters Association acting president Md Siddiqur Rahman said, 'It's a big threat to the apparel sector as all the components are related to one another and cotton is most important of them."
He said: "Cotton price is an import issue for the survival of the apparel sector so the government should immediately pay attention to the matter."