Yarn sale falls despite Eid and Pahela Baishakh
The sale of yarn for making the fabrics for domestic market has fallen in the peak season of Eid-ul-Fitr and Pahela Baishakh because of high prices of some basic commodities and for the high cost of living for consumers.
The fall in demand for yarn also resulted from an abnormal hike in gas and power prices which increased the cost of production.
Following the low demand and low sales, stocks of unsold yarn meant for making fabrics for the domestic market have been growing at the factory level.
Moreover, many small and medium entrepreneurs did not weave the fabrics ahead of Eid-ul-Fitr in bulk quantity as they thought that they will not be able to make a profit after paying higher gas and power tariffs.
"As a result, the sale has been low until now," said Khorshed Alam, chairman of Little Group, which mainly produces yarn for the domestic market for making three pieces for women alongside lungis and saris.
"Usually, sales of yarn gained momentum way ahead of Ramadan in previous years. But this year the sale is still very low."
"Usually, sales of yarn gained momentum way ahead of Ramadan in previous years. But this year the sale is still very low," he said.
Nearly 65 per cent of the yarn that he produced targeting the sales during Eid-ul-Fitr and Pahela Baishakh still remain unsold which is unusual compared to previous years.
Usually, the peak season of sales of yarn starts 45 days ahead of Ramadan and continues until the 10th day of Ramadan.
However, this time the sales are still low and only 35 per cent of yarn has been sold so far and the stocks are rising at the mills, said Alam, who is also the chairman of the standing committee on local spinning, weaving, dyeing and printing mills of Bangladesh Textile Mills Association (BTMA).
He also partially blamed sales of cheap yarn from India and China for lower sale of locally produced yarn in the markets.
The middle-income group of people, who are the major consumers, reduce the purchase of clothing items as they have to spend more money for buying food items, Alam added.
The lower sale of yarn also affected the production of saris, lungis and other zakat items in the major areas like Madhabdi, Shekherchar, Belkuchi, Narsingdi, Pabna and Sirajganj.
The weavers are also complaining that they might not be able to make a profit after paying at the increased rate of gas and power, said Alam, who also supplies fabrics for three pieces for women.
For instance, a miller who used to pay Tk 2.5 crore in gas bills in a month now has to pay Tk 4.5 crore in gas bills a month, he said.
Similarly, Mosharraf Hossain, chairman and managing director of Mosharraf Spinning Mills at Shekherchar, Baburhaat in Narsingdi, said he did not see such low sales of yarn over the last 35 years of doing business.
Usually, the sales of the yarn and fabrics starts from Shab-e-Barat but this year the sale is yet to be gain momentum although Ramadan has begun, Hossain told The Daily Star over the phone.
The abnormal hike in gas and power tariff and sale of cheap Chinese and Indian yarn is mainly blamed for lower sales of yarn produced by the local millers, said Hossain.
BM Shoeb, managing director of Nannu Textile, a Narayanganj-based yarn and fabrics manufacturer, said every month he can sell 10 lakh yards of fabrics for three pieces but the sale dropped to 5 lakh yards even in the peak time of sale ahead of Eid-ul-Fitr.
Shoeb, who also runs a showroom at the city's Islampur market, said the Indian and Pakistani fabrics caused prices in the local fabrics market to fall.
The overall economic situation worsened and the gas and power tariff hikes are mainly responsible for the fall in sales of fabrics, he added.
Sales have dropped by more than 50 per cent for Debyani Textile, a dress materials manufacturing mill at Madhabdi in Narsingdi, said Binoy Debnath, managing director of the mill.
Some Tk 30,000 crore worth of yarn and fabrics are sold in the local market during Eid-ul-Fitr and Pahela Baishkh every year but this time the sale is too low because of the high cost of living as the consumers need to spend money on food items, said Monsoor Ahmed, additional director to the BTMA.
BTMA President Mohammad Ali Khokon also said until now the sale in the local market has been low but that the sales would gain momentum soon was expected.
Up until February this year, the sale of yarn has been good but all of a sudden the sales dropped significantly at the beginning of the March, he added.
The total market size of the local garment is $8.37 billion and the investment in this segment is $6 billion, he said.
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