Garment makers and textiles producers are locked in a row over the formation of a panel intended to regulate local cotton yarn prices, officials said.
The Bangladesh Garment Manufacturers and Exporters Association handed a proposal to the ministry of commerce (MoC) to constitute the Cotton Security Council, which is supposed to control prices of domestic cotton yarn.
The apex body of apparel makers has also demanded inclusion of the provision of council into the new export policy of 2015-18, they said.
But the Bangladesh Textile Mills Association has opposed the idea and sent a letter to the ministry, calling the proposal 'unreasonable', 'unrealistic' and 'inconsistent.'
The country's spinning mills are providing some 80 per cent and 40 per cent cotton yarns to the domestic knit and woven garments units at competitive prices, acting as backward linkage.
The domestic spinning mills are often competing with the imported cotton yarn.
Prices of the country's yarn depend mainly on three factors: prices of imported cotton yarn, prices of Indian cotton yarn and domestic demand of apparel makers.
The prices of the yarns depend on the size and productivity of the domestic mills as well.
Textiles lobbyists say they have no hand, rather the market determines the yarn price as Bangladesh follows free market economy.
They say prices of Indian cotton yarn and orders of local garment exporters are low, forcing domestic spinning mills to keep prices in consistent with Indian yarns.
Textile miller say expansion and competitive situation of the country's spinning mills will be hampered if the proposal to form the council is accepted. So, there is no need to formulate the council in the country, they said. Â
"There is a need for a balanced council on cotton yarn so that interests of both sides are protected," former president of BGMEA Abdus Salam Murshedy told the FE.
He said the council will take decision impartially when the situation demands.
"The domestic spinning millers depend entirely on imported cotton. Besides, prices of cotton yarns are fixed according to the New York futures market," Jahangir Alamin, a former president of BTMA, told the FE last week.
He, however, said no organisation can control the prices of cotton yarn in the international context. It will be against the free market economy if any move is taken to control the prices of domestic cotton yarn. Â
Presently, there are 407 spinning under the BTMA in the country.
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Cotton council formation faces opposition
Rezaul Karim | Published: March 09, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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