Friday, May 24, 2024

Spinners see red as apparel makers rush for Indian yarns

BTMA leaders meet textile minister, ask for supports
Kazi Azizul Islam
Bangladeshi spinners are suffering discouraging difficulties with their product stocks mounting as local apparel exporters are going fast for cheaper yarns of India, where a much-devalued currency favours the Indian exporters, said the Bangladesh Textile Mills’ Association.
Meeting the textile minister, Abdul Latif Siddiqui, on Tuesday leaders of the association sought safeguards as Indian spinners were shipping yarns to the Bangladeshi apparel makers at dumping prices.
They demanded that the existing five per cent cash incentives for using local yarns should be raised to 15 per cent and six per cent cash bonus for the exporters as an interim support from the proposed funds for research and development.
The BTMA leaders also urged the government to suspend the term loan repayment till 2009.
The BTMA president, Abdul Hai Sarker, its former president A Matin Chowdhury, directors Abdul Quashem Haider, Khan B Rahman and Nurul Islam met the textile minister.
Earlier on Monday, BTMA claimed that more than one lakh tonne yarns worth Tk 1,700 crore was stockpiled at the spinning units, which had been forced to cut down production by 30 per cent on an average.
At a briefing held at the BTMA office, A Matin Chowdhury, described to the press how Indian yarn exporters, blessed with a huge devaluation of their currency in recent times, were wooing Bangladeshi knitwear-makers.
‘Mounting stocks have forced most of the spinners to cut down production by around 30 per cent of their capacities,’ said Matin, ‘As there is no more space in their warehouses, many spinners are piling yarns in their production sheds.’
Matin said since January 1, 2008 to date the Indian rupee had been devaluated by 24 per cent against US dollar and Pakistani rupee, another major yarn-exporting country, had been devalued by 26 per cent. In comparison, Bangladeshi currency remains strong with only 0.05 per cent devaluation.
‘An Indian exporter is selling a kilogram of yarn at as low price as $2.1, up from $2.6 one year back.’
He argued, ‘Abundant availability of locally produced cheaper cotton locally makes Indian exporters able to reduce yarn prices instantly while it takes around five months for Bangladeshi spinners to channel the price cut in cotton to yarn due to their dependency on imported cotton.
‘We find many of our regular buyers say that they have booked Indian yarns for their next production schedules,’ said Matin regretting that liberal regulation allows apparel exporters to procure yarns in advance of export orders.
BTMA demanded that government make it mandatory for the apparel exporters to open letter of credits for importing yarns as at present the apparel makers import yarns showing a mere contract paper.
Matin told journalists that, unusual in the past eight years, his spinning mill granted more than a week-long Eid holiday for the workers last month while Sarker said a few spinning units are about to close with cutting production by 50 per cent of capacities.
They both warned if government did not launch any immediate support package to compensate spinners’ eroding competitiveness, most of the country’s 341 spinning units would be closed down within a few weeks or months.]
They cited that Turkey a leading knitwear exporting country, had launched safeguards for their spinners by imposing around 20 per cent customs duty on imported yearns.

Courtesy: newagebd.com

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