Some 60 percent of over 1 lakh small and medium power looms which were mainly serving the domestic market have been shut down over the last six months.
This is a result of the sale of yarn and fabrics which have been illegally imported through false declarations by a section of unscrupulous traders intending to avail the bond facility.
The scale of power loom closures can be better understood if the case of Sirajganj district is taken into consideration.
Nearly 4,000 out of 10,000 power looms have been shut down there due to the invasion of illegally imported yarn and fabrics, which mainly grabbed the domestic markets, said Mohammad Ali Khokon, president of Bangladesh Textile Mills Association (BTMA).
Addressing a press conference at the Sonargaon hotel in Dhaka, he said the loom owners have been facing a massive invasion of illegally imported fabrics and yarn in the domestic markets.
Now the loom owners have been running their units at 40 percent below their capacity as they cannot sell their goods at competitive prices, he added.
“While we are issuing complaint we also commend recent initiative of the customs department as some consignments have been seized,” Khokon said. For instance, 86 containers of illegally imported yarn and fabrics worth nearly Tk 300 crore were seized over the last three months, he said.
A section of unscrupulous traders have taken to storing goods eyeing the upcoming Eid festival when sales grow a lot in domestic markets, he said.
Khokon said currently the size of the domestic clothing market was around Tk 75,000 crore and the investment in this segment is Tk 120,000 crore. “We are losing such a big domestic market because of duty-free illegal import of goods,” he said.
Moreover, production in nearly 300 spinning mills has been closed over the last one year and capacity has been lowered to 80 lakh spindles from 1.10 crore, he said.
The spinners and weavers have been selling the yarn and fabrics at 10-30 cents lower than what it cost to produce those because of lower demand from the garment factory owners.
If the proposed gas and power prices are implemented in such a situation, the prices of those vital utilities will be doubled, he said.
It will take 0.38 cents to produce a kilogramme of yarn rather than the existing rate of 0.19 cents while the production coast of a kilogramme of fabrics will reach 0.44 cents from 0.22 cents, he said.
Khokon demanded that the government intensify patrols by the customs department in Narayanganj, Araihazar, Madhabdi, Baburhaat, Narsingdi, Taanbazar, Sirajganj, Pabna and in places where the illegally imported yarn and fabrics are sold.