Costly cotton makes clothes expensive
Cotton is getting costlier worldwide, meaning higher prices of clothing items will ultimately burden the customers. Cotton was quoted at $1.53 per pound in the New York Futures trading yesterday, up from $0.95-$1.10 on the international market in August-September last year.
The rise in prices came due to stockpiling by China, the largest consumer of cotton, a poor harvest in cotton growing countries such as Uzbekistan, last year's devastating flood in Pakistan, the fourth largest cotton supplier of the world, and restriction on cotton export by India, the second largest cotton growing country.
Cotton futures prices in China are rising steadily in line with the recovering demand from the textile industry. Textile firms are also increasing their cotton stockpiles due to worries over a further rise in prices.
A senior official of a German brand, having liaison office in Dhaka, said, for the last three to four months the buyers have been paying more for the Bangladeshi garment items as the cotton prices went high worldwide.
"The ultimate pressure will be passed on to the consumers because the retail chains of the western countries will increase the prices at the customers' end," he said, requesting not to be named.
The Bangladeshi garment makers have also increased the prices of clothing items by 25-30 percent for higher cotton prices. The country needs to import all its cotton, and last year the volume was more than 50 lakh bales (440 pounds make a bale).
A Matin Chowdhury, managing director of Malek Spinning Mills Ltd, a major cotton importer, said Bangladeshi garment makers are in dilemma at the present cotton price.
"We have a lot of orders from the buyers, but we are in dilemma whether we would take all the orders because the cotton prices are increasing almost everyday," said Chowdhury, also a knitwear maker.
A senior merchandiser of a UK-based garment company operating in Bangladesh said they have increased the prices of garment items by 25-30 percent from the last spring to cope with the new prices of cotton.
"The buyers agreed to the hike because the prices of raw materials have gone up," the merchandiser said, requesting anonymity.
In its latest move, India, one of the major sources of cotton for Bangladesh, agreed to resume cotton export from January 11 until February 25.
Up to Monday, a total of 5,270 bales of Indian cotton entered Bangladesh through Benapole Land Port after the Indian government temporarily withdrew the ban on cotton exports. India will export 2.5 million bales during this one and a half months.
The Indian government has already set an export ceiling of 5.5 million bales for the ongoing season -- October 2010 to September 2011.
India imposed the ban for the second time in a year on December 15 to boost its stocks for the local market. In 2010, the first ban came on April 21 and continued till October 31.