Yarn imports soar 39pc amid local spinners' struggles

Yarn imports witnessed a significant surge in 2024, creating uneven competition for local spinners against foreign companies mainly because of higher production costs fuelled by a gas crisis, industry people said.
Bangladesh imported 680.43 million kilograms of cotton yarn under bonded facility last year, which was 39.16-percent higher than the 2023 figure of 488.96 million kg, according to the data compiled by Bangladesh Textile Mills Association (BTMA).
The country paid some $2.27 billion for the 2024 imports, which was $1.75 billion in 2023.
Besides, the imports of woven and knitted fabrics recorded a 20.02 per cent and a 38.35 per cent rise, respectively, in 2024.

Bangladesh imported 588.85 million kg of woven fabrics last year, which was 490.63 million kg in 2023. On the other hand, knitted fabric imports stood at 439.07 million kg in 2024, up from 317.36 million kg in the previous year.
Due to higher production costs, the gas crisis, and incentive cuts, domestic textile millers, especially spinners, are facing uneven competition against their foreign competitors and also losing yarn orders even from local readymade garment (RMG) exporters, industry people said.
RMG exporters for the last one year preferred sourcing the raw material from abroad, hindering the local spinning sector's growth, they also said.
Yarn is required to manufacture fabrics. RMG exporters usually source raw materials like yarn and fabrics from the local market when they have a pressure of work orders and have to shorten the lead time despite a price difference, insiders added.
Garment exporters said local yarn prices are higher than that of the imported variety, while textile millers argued that the high costs of utilities and poor gas supply pushed up their production costs, making local yarn pricier.
When asked, former Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Fazlul Hoque said yarn imports increased mostly from India because of the local variety's high prices.
The price difference between the local and imported combed yarn went up to 40 cents per kg on average, he said, adding apparel makers having more capabilities, including large storage facilities and long lead time, prefer imported yarn.
Besides, the government has cut incentives that earlier encouraged RMG exporters to source yarn from the local market, he noted.
Echoing Hoque, former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan said they need some finer count yarn to produce value-added and blended (mixture of cotton and other manmade fibres) garments, which local spinners cannot provide.
Though there are a few mills that produce manmade fibres, the prices are high, he said.
The price difference between local and imported yarn was 20-30 cents previously, which has now increased, said Hassan.
He alleged local millers are unwilling to supply yarn over 40 counts or 42 counts, which also encouraged RMG exporters to opt for imports.
Talking to The Financial Express on Sunday, Little Star Spinning Mills Chairman Khorshed Alam claimed India is exporting yarn to Bangladesh at a dumping rate for having its own raw material of cotton and storage facility near the Benapole port.
He alleged Indian businesses are selling their yarn at a dumping rate as they get policy support from their government while they have their own cotton.
For example, he said, India provides various policy support for its local textile mills, including incentives on labour and electricity costs.
As a result, millers can sell their products at the same rate as their production costs, Alam added.
"On the other hand, we do not have the main raw material - cotton. Besides, we are not getting the required gas supply and bank interest rates have gone up to double digits,"  the businessman explained.
Indian yarn exporters also make quick deliveries through the Benapole port immediately after orders are placed, he noted. According to Alam, local yarn prices in Bangladesh have gone up due to high utility costs and gas supply shortages.
"Costs increased on the one hand, and on the other, millers cannot use their full production capacity due to the poor supply of gas," he added.
Local yarn is losing competitiveness and garment exporters are sourcing yarn from outside the country under the bonded warehouse facility as the imported variety is cheaper than the local one, Alam further said.
He also alleged that some traders imported yarn by using the licences of some exporters and imported higher counts of yarn, such as 80 counts, under the name of 30 counts.
Industry insiders say local textile mills meet about 80 per cent of the demand for the knitwear subsector and 35-40 per cent for woven.
Bangladesh fetched $38.48 billion from RMG exports in 2024, with knitwear earning $20.52 billion and woven $17.95 billion, according to the BGMEA data. The country earned $35.88 billion in 2023 from garment exports.
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