Mill owners in a tight corner

More than Tk 25,000 crore worth of yarn and fabrics have remained unsold in the last five months due to sudden deluge of low-cost Chinese and Indian substitutes in the local markets ahead of Eid, said the Bangladesh Textile Mills Association (BTMA).

The majority of the demand is being met by the Chinese and Indian yarn and fabrics, which are imported under bond licences and illegally sold in the domestic market by a section of unscrupulous traders, said Mohammad Ali Khokon, acting president of the BTMA.

The traders are being enabled by the lax monitoring by the customs department, he told a group of journalists at the BTMA office in Dhaka on Saturday.

The yarns and fabrics are used to make saris, salwar suits, bed sheets, scarves, lungis and so on, and the local yarn makers and weavers sell Tk 25,000 crore to Tk 30,000 crore worth of products ahead of Eid-ul-Fitr and Eid-ul-Azha, according to Khokon.

However, this year, the local spinners, dyers and weavers are sitting idle. “We have received more than 300 complaints from mill owners.”

The goods imported under bond licences are not allowed to be sold in the local market as those are imported duty-free for exporting to different countries after processing in factories.

Moreover, the government has imposed nearly 64 percent duty on commercial import of fabrics to allow the local industry to flourish. As a result, over the years local entrepreneurs had invested more than $6 billion in the country's primary textile sector, Khokon said. With the flooding Chinese and Indian goods, nearly 60 percent of the one lakh power looms located in Narsingdi, Madhabdi, Baburhaat, Rupganj, Araihazar, Pabna and Sirajganj are shut for now.

Khokon complained that the Indian goods are entering Bangladesh through the 17 bordering points, especially the border haats set up along the bordering areas by both the Indian and Bangladesh governments in the last few years.

Bangladesh imported yarn worth $1.10 billion in 2017, up from $991 million in 2016.

The garment makers imported fabrics worth $3.61 billion in 2017, up from $3.51 billion in 2016, according to data from the National Board of Revenue. Currently, Bangladesh has 415 spinning mills and more than 800 weaving mills. The production capacity of woven fabrics in the country is 3,000 million metres, according to data from the BTMA.