Cotton prices in the global market have declined to 73 US cents from the peak of $1.2 to $1.3 per Kg in June; still unsold stock of 500000 tons is a hindrance in new purchases for Bangladeshi spinners.
In normal times they used to sell 1.2crore kg of yarn per day to garment manufacturers. However, the disposal of yarn to garment exporters has dwindled to only 80 lakh kg per day. It will take a long time to dispose of the unsold stocks of yarn.
This is the reason that the spinners of the country are not elated by the sharp decline in cotton rates. Another cause of concern is the regular increase of dollars against the Bangladeshi Taka. The energy crisis, particularly the availability of gas and its low pressures has emerged as a greater worry. On top of that, the demand for garments in the global market is declining, resulting in low orders.
The spinners in normal times used to brim with joy even on reduction of a few cents in cotton rates as Bangladesh is the net importer of cotton but the drop in cotton prices by 60 US cents has brought no joy for them. A miller said spinners cannot take advantage of lower prices because of the high dollar rate and low gas pressure. He said the yarn production had already declined by 50 percent due to lower gas pressure.
Another worry for the local spinners is how to dispose of huge unsold yarn stock produced from cotton imported at very high rates. They are sitting on piles of unsold yarn made from cotton imported earlier at a higher price.
The current rate of 30-carded yarn ranges from $3.55 and $3.60 per kg in Bangladesh. In March and April, the price was $5.25-$5.30 per kg. The importers that booked cotton at $1.30 per kg are worried because spinning yarn at high-cost cotton would not be feasible for them.
