The government has hiked export prices of 'Jhut', in a move that will offer lifeline for scores of terry towel makers, while boosting supplies for spinning mills, a top export official said.
Garment 'Jhut' becomes a major raw materials for terry towel industry and a section of textile mills after beingprocessed.
The decision was taken at a recent meeting, where export prices of a tonne of coloured 'Jhut' has been re-fixed at US$ 235 from its existing rate of $140.
The rate of white 'Jhut' has also been fixed at $ 600 per tonne.
Earlier, the rate of only 'Jhut' was fixed but as the exporters would export all types of 'Jhut' at $140 without mentioning its colour, for which the government now decided to fix a separate rate of the both coloured and white 'Jhut'.
But a large portion of 'Jhut' has long been exported to India and China, creating shortage of such materials in the country," Vice Chairman of the Export Promotion Bureau (EPB) Suvashis Bose told the FE.
Considering the need for ensuring available raw-materials of local industry at a reasonable price, the government has decided to re-fix its prices, he added.
Mr Bose said many hi-tech factories have been set-up in India and China to re-process garment 'Jhut'. These factory owners source their raw-materials mainly from Bangladesh creating crisis of the goods and also boosting prices in the local market.
Belayet Hossain, managing director of RTT Textile Industries Pvt Ltd. a terry-towel mill-owner, hailed the government's decision, saying "The new rate will act as a lifeline for factories with lower capital base."
"Small and medium factories were losing their competitiveness in the international market for high prices of yarn. The new decision will become a boon for them and they will be able to boost export again," he added.
In the meantime, Mr Hossain said that as many as 16 export-oriented medium scale terry towel factories have been closed down mainly for want of raw materials and its higher prices. "This decision may help these exporters to re-start their operations again."
However, EPB data showed export of 'Jhut' was $20.03 million in the fiscal year 2010-11, $25.34 in FY 2011-12, $29.33 in FY 2012-13 and $ 31.05 in the last fiscal.
On the other hand, export of terry towel has drastically fallen by more than 60 per cent in the last five financial years. The EPB data showed that the country exported terry towel worth $67.16 million in the last fiscal, which was $ 157.07 in 2009-10 fiscal.
However, no exporter of 'Jhut' could be contacted for their comments.
Terry towel manufacturing companies have started growing in the country since 1980s. Bangladesh's terry towel products mainly go to the US, Canada and European markets.
Bangladesh produces different types of terry towels such as face, hand, terry kitchen, stripped bath, assorted coloured bath, dyed terry bath, golf and bath robe for export.
At present around 97 companies have been operating in the country in producing and exporting of terry-towel across the globe.
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