Syful Islam
Yarns worth Tk 25,000 crore were lying in the country’s textile factories, as local products can’t compete with Indian ones due to price difference, posing threat to the growing industry, stakeholders say.
They said neighbouring India is dumping its low quality yarn, facilitated by recent depreciation of rupee against US dollar and government subsidy.
Industry owners said the quantity of unsold yarn is continuously increasing, creating liquidity problem for the mills and apprehends that many factories may face closure due to failure to import raw materials.
Sources in the Bangladesh Textile Mills Association (BTMA) said India has increased its yarn production following post Multi Fibre Agreement (MFA) but it failed to increase forward capacity. Besides, recent devaluation of rupee by 24 per cent has facilitated the exporters to earn more profit. As a result India is dumping extra produced yarn in Bangladesh at low cost.
Price of per kilogram of locally produced yarn is US$2.30 while India offers per kg of yarn at US$2.10 to US$2.15. As a result country’s knitwear factories prefer low priced Indian yarn instead of local ones.
Statistics shows that yarn import through Benapole landport is increasing day by day. Yarn import in August `08 against August `07 rose by 836.79 per cent, in September by 411.20 per cent, October by 97.63 per cent and November by 82.63 per cent. On the other hand yarn import during December `08 against August `08 rose by unbelievable 16285.68 per cent.
BTMA president Abdul Hai Sarker said local textile mills can meet 95 per cent demand but knitwear companies prefers Indian yarn due to low price. He said if the local textile mills face closure due to price differences the unsold goods in the country will face tough situation. He demanded immediate stoppage of yarn import through Benapole land port to save the local textile mills.
Stakeholders said textile mills are facing acute gas crisis leaving full use of total production capacity. As a result the price of per kg of yarn production is increasing sharply. In the last 6/7 months production of textile mills reduced by 40 per cent due to gas crisis, they said.
The government declared textile industry as thrust sector in 1992. As a result number of textile mills in the country rose to 118 in 1994-1995 from 70 in 1971. 341 spinning factories were established between 1994-95 and 2008-09 with Tk 27,000 crore investment. But no investment was made in textile sector in the last 6 months, stakeholders say.
Courtesy: nation.ittefaq.com
