Buy yarn, fabrics from local mills
Textile millers in Bangladesh yesterday urged woven and knitwear exporters to buy a portion of their required yarn and fabrics from local markets so that they can overcome the current crisis situation and help save the country's foreign reserve.
The value addition is 60 per cent when local yarn and fabrics are used while it is 30 per cent for imported textile, according to local millers.
And with work orders from international retailers and brands having fallen by nearly 30 per cent, garment makers and exporters are still mainly using imported yarn and fabric.
As a result, the stockpiling of unsold yarn and fabric at local mills has been growing rapidly, pushing the $23 billion primary textile sector under threat.
Most of the yarn and fabrics for export-oriented garment factories in the country come from India and Pakistan, said Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA).
He was speaking at a press conference arranged by the BTMA at its office in Dhaka yesterday.
The BTMA held the press conference to explain the current crisis situation of the textile sector stemming from the US dollar crisis, gas crisis and stockpiling of unsold yarn at the mills.
Local weavers and knitters imported 2.75 lakh tonnes of yarn worth Tk 10,616 crore in the January-April period of the current calendar year.
During the same period of 2022, they imported 4.60 tonnes of yarn worth Tk 17,436 crore, as per BTMA data.
Khorshed Alam, chairman of Little Group, said he already shut down one of his units as sales have dropped due to the availability of illegally imported yarn and garment items from India and Pakistan.
Meanwhile, he is running another unit at only 30 per cent capacity because of low gas pressure.
"The millers are not getting gas with adequate pressure even though the government doubled the gas price last year," he added.
BTMA President Khokon also demanded the government increase the limit of funds available from the Export Development Fund (EDF) for each borrower as many are struggling to maintain their business amid the US dollar shortage.
At present, each borrower can avail $20 million from the EDF while it was $30million during the Covid-19 pandemic.
Besides, the National Board of Revenue should keep conducting frequent drives in areas like Narayanganj, Araihazar, Rupganj, Madhabdi, Baburhaat, Narsingdi, Belkuchi and Sirajganj, where illegally imported yarn is sold at cheaper rates.
The cost of production at textile mills has increased by a maximum of Tk 40 per kilogramme of yarn due to the gas price hike and US dollar shortage.
At the same time, millers are having to operate at 40 to 50 per cent capacity due to low gas pressure.
Khokon went on to say that because of the flood of garment items from Pakistan, the country's $3 billion market for women's apparel is now in trouble.
Most Pakistani garment items are imported through online orders though social media platforms such as Facebook, he said.
This deprives the government of huge sums of revenue as a section of traders are importing Pakistani garment items without paying the customs duty while violating other rules, Khokon added.
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