Textile sector in for worse times as cotton, yarn prices keep spiraling
Monday, 24 May 2010
Mehdi Musharraf Bhuiyan
The country’s textile manufacturing is set to lose around 30 per cent in terms of export volume during the ongoing fiscal, leaders in the sector warned Sunday, as the prices of cotton and yarn continue to bite.
The bleak situation, textile manufacturers say, has worsened further by the ongoing energy crisis. Besides, a number of the country’s spinning mills have already faced closure in the recent times due to internal and external turbulence.
“We are bracing for tough times ahead,” said Liaquat Rana Bhuiyan, Director of Litun Fabrics Limted and Dhaka Denim Limited, two leading exporters of textile, adding: “our export volume could drop by 30 per cent this fiscal due to ongoing troubles”.
The price of yarn in the local market has doubled in April, driven by increased global demand that saw prices rise to a 10-year high and a ban on cotton export by the second largest producer India.
According to industry insiders, a total of 34 of the country’s textile mills have faced closure in recent times against the backdrop of this situation, while the existing ones have to cut their production by 30 to 35 per cent.
“Usually, yarn procurement comprises around 75 per cent of the total production cost of textile,” Liaquat said, adding: “but that cost is now up by around 30 per cent due to price hike of cotton”.
Bangladesh’s textile manufacturers are usually dependent on raw cotton imported from different CIS (Commonwealth of Independent States) countries, Turkey and the USA while a large amount is also shipped from India.
The textile millers are facing crisis due to fluctuation of cotton price in international market, while the major competitors like India and China continue to rely on their own domestic production for raw materials.
According to insiders, the situation is not helped either by the recent removal of ban on yarn import through Benapole land port, as they say that the government move would not help the export-oriented sector.
“The decision to withdraw the ban on yarn import through Benapole would be beneficial only to the local handloom owners”, said Ashish Bhadra, Senior Marketing Executive of Shahsha Denims Limited.
“It is unlikely to have any positive impact on export-oriented industries which mainly depend on coarse yearn for their production”, he added.
The view came at a time when one of the biggest expositions of the country’s textile industries, namely TexBangla is being staged in the city.
“TexBangla is mainly aimed at showcasing the industry performance to the local authorities,” said Abdul Hai Sarkar, President of Bangladesh Textile Mills Association (BTMA).
The country’s textile manufacturing is set to lose around 30 per cent in terms of export volume during the ongoing fiscal, leaders in the sector warned Sunday, as the prices of cotton and yarn continue to bite.
The bleak situation, textile manufacturers say, has worsened further by the ongoing energy crisis. Besides, a number of the country’s spinning mills have already faced closure in the recent times due to internal and external turbulence.
“We are bracing for tough times ahead,” said Liaquat Rana Bhuiyan, Director of Litun Fabrics Limted and Dhaka Denim Limited, two leading exporters of textile, adding: “our export volume could drop by 30 per cent this fiscal due to ongoing troubles”.
The price of yarn in the local market has doubled in April, driven by increased global demand that saw prices rise to a 10-year high and a ban on cotton export by the second largest producer India.
According to industry insiders, a total of 34 of the country’s textile mills have faced closure in recent times against the backdrop of this situation, while the existing ones have to cut their production by 30 to 35 per cent.
“Usually, yarn procurement comprises around 75 per cent of the total production cost of textile,” Liaquat said, adding: “but that cost is now up by around 30 per cent due to price hike of cotton”.
Bangladesh’s textile manufacturers are usually dependent on raw cotton imported from different CIS (Commonwealth of Independent States) countries, Turkey and the USA while a large amount is also shipped from India.
The textile millers are facing crisis due to fluctuation of cotton price in international market, while the major competitors like India and China continue to rely on their own domestic production for raw materials.
According to insiders, the situation is not helped either by the recent removal of ban on yarn import through Benapole land port, as they say that the government move would not help the export-oriented sector.
“The decision to withdraw the ban on yarn import through Benapole would be beneficial only to the local handloom owners”, said Ashish Bhadra, Senior Marketing Executive of Shahsha Denims Limited.
“It is unlikely to have any positive impact on export-oriented industries which mainly depend on coarse yearn for their production”, he added.
The view came at a time when one of the biggest expositions of the country’s textile industries, namely TexBangla is being staged in the city.
“TexBangla is mainly aimed at showcasing the industry performance to the local authorities,” said Abdul Hai Sarkar, President of Bangladesh Textile Mills Association (BTMA).