Bangladesh textile millers temporary ban cotton yarn imports, RMG sector opposes it

The spinners in Bangladesh are experiencing similar problems as faced by Pakistani spinners, their cost of production has gone high and sales in the domestic market have declined although appetite for yarns has increased as the RMG sector operates in top gear.

Bangladesh’s yarn producers do not export yarn and depend solely on its domestic market.

Pakistani spinners sell both in domestic and global markets but their sales are down in both due to higher cost and a decline in garment exports. Have played the forex card by asking their government to Bangladesh textile millers have played the forex card by asking the government to ban yarn imports till the foreign exchange situation improves. These mills are sitting on huge yarn stocks as the RMG units have increased the import of both carded and combed yarn
The Bangladesh Textile Mills Association (BTMA) president Mohammad Ali Khokon in a letter to the Bangladesh Bank governor proposed a temporary ban on yarn imports. The RMG sector has opposed the ban as it would impact the competitiveness of the value-added sector of the country.

Local spinners numbering 510, with a 3,600 million kg production capacity, can only meet 70 percent of the demand for cotton yarn by the export-oriented RMG industry, BTMA claimed.

The export-oriented RMG industry imports a large quantity of cotton carded and combed yarn through bonded warehouse facilities, which requires a considerable amount of US dollars, Khokon said.



Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) warned that the yarn import ban will lead to a domestic oligopoly, buyers would not be able to pass on higher yarn prices to foreign buyers and impact RMG exports. Even the knitwear sector, which sources most of its yarn and fabric from domestic suppliers, also opposed any restrictions on such imports.