Home Textile Cheap yarn imports make textile millers walk a tightrope

Cheap yarn imports make textile millers walk a tightrope

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Yarn and fabric from China are exported to Bangladesh at a lower price and Textile industries are facing hard challenges and incurring business losses, such as they can’t contend with imported yarn and fabric at very low prices.

It states that China is providing straight cash returns to exporters of about 16 to 21% on its export of material to Bangladesh.

In March 2019, the rate of cotton fiber reduced owing to lower cotton rates in the international marketplace, along with a sufficient supply of yarn and fabric from China, Pakistan, and India.

United States Department of Agriculture (USDA) says the local textile millers are facing tough competition due to ample imports of low-cost yarn and fabrics. Some of them are about to leave the marketplace and are facing a challenge selling with a huge stockpile of unsold fabric.

Local readymade garments (RMG) manufacturers are importing yarn and fabric from India, Pakistan, and China using a bonded warehouse (zero tariffs on the import of raw materials for an export value-added product) advantage.

Mostly the imported yarn and fabric with zero tariffs are then illicitly sold to the local marketplace which forces down rates in the domestic market and makes national weaving mills and spinners more competitive countries USDA report.

As a result of yarn oversupply in the national marketplace, rates fell nearly 15-201 percent, however some textile millers and spinners suffered such as a result, the report says also noting that “Several millers planned to cut overseas buying of cotton for yarn and fabric manufacture as they were struggling in the marketplace due to the flood of imported yarn and fabric from India and China.”

More foreign consumers of value-added apparel are buying from Bangladesh due to low labor cost, competitive rates, and an appreciated US dollar versus the Bangladesh Taka.

So they say, some high-end millers have increased manufacture capacity to satisfy higher national and international demand says USDA report.

Bangladesh presently has 431 spinning mills, 23 home textile mills, 804 weaving mills, 32 denim fabric mills, 2445 dyeing and finishing mills, and a complete of 6,502 registered and 526 un-registered garment industrial units.

Bangladesh imported cotton from 42 states all over the world in 2017-18. Among them, Mali (9%), Burkina Faso (8%), Benin (8%), Brazil (7%), Uzbekistan (6%), India (24%) and the U.S. (10%) take the major share of volume, followed by Australia (9%), and others.

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