• Tuesday, Sep 28, 2021
  • Last Update : 08:10 pm

Knitwear makers, exporters baffled by soaring yarn prices

  • Published at 12:28 am March 4th, 2021
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They also called for a policy to ensure stable yarn prices as it is fluctuating abruptly and changing frequently without prior notice

Knitwear manufacturers and exporters have called for keeping yarn prices unchanged for at least a month to help them to negotiate prices of their goods with global buyers.

They also called for a policy to ensure stable yarn prices as it is fluctuating abruptly and changing frequently without prior notice.

Exporters and trade leaders from the sector made the call amid fluctuation and soaring yarn prices at an extraordinary general meeting (EGM) of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) held at a hotel in the capital on Tuesday.

Shafiul Islam Mohiuddin, MP and former FBCCI president, attended the event as chief guest, while Selim Osman, BKMEA president, moderated the programme. 

The EGM was convened to discuss the ways to come out from the present crisis caused by the Covid-19 pandemic, which pushed the prices of raw materials up and slashed demands of finished goods.     

"We are getting good responses from the buyers and the work order flow is better. But the problem is soaring yarn prices, which goes up abruptly," said Shamima Akhter, managing director of KAP'S Fashion.

The lack of advance notice on soaring prices is forcing Bangladeshi exporters to lose their competitiveness in the global export market, she added.

"It is not understood why the prices of yarn are going up indiscriminately. They fluctuate so frequently that we cannot fix a deal with the buyers within the set prices," said Zakir Hossain Jewel, managing director of Best Style Composite.

It goes up by $0.10 to $0.20 per kilogram amid negotiations between a buyer and a yarn manufacturer, he also said.

According to BKMEA data, the prices of mostly consumed 30-carded yarn rose to $4.81, which was $2.78 last year.

As of February 2021, the average prices of yarn went up to $3.77 per kilogram from $2.94 a kg in 2020. 

The exporters called for holding a tripartite meeting among Bangladesh Textile Mills Association (BTMA), Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and BKMEA to put a leash on the price hike.

They also urged for keeping the yarn prices static for at least a month, as well as informing the buyers about the change 15 days beforehand, so that negotiations can be better dealt.

However, textile millers claim that the cotton yarn prices increased sharply due to the surge in cotton prices in the global markets.

"As the cotton prices in the international market went up, the prices of yarn rose. We have to import as we are not a cotton-producing country," said Mohammad Ali Khokon, BTMA president.

As per BTMA data, per pound cotton cost $0.90 to over a dollar yesterday, which was $0.56 to $65 in 2020.  

"Global cotton prices and cotton index is open to all. Let us meet and set a price keeping a 3 per cent profit based on the index of global cotton prices," said Khokon.

"We would like to work together and have to consider the reality for the sake of the apparel and textile industries," he added.

"We are going through a critical time and facing challenges one after another, amid the pandemic, said Selim Osman.

"Raw materials prices went up, while freight charges moved up manifolds. Amid the crisis, customs officials harassing us is rubbing salt on the wound of exporters," said the business leader.

"On top of that, within the next four months there will be two Eids, when we have to pay workers wages and bonuses," he also said.

"In the given context, it would be difficult for us to repay both loan instalments and interest. It is our earnest call to the government to consider either the installment or the interest," said Osman.

Osman also called for the new stimulus package considering the present situation. 

"We are exporting and yet sacrificing our profits just to survive. The rising yarn cost is a burden amid the pandemic," said Fazlul Haque, a former BKMEA president.

In case of repayment of loans, the government should not take any steps that may pressurise the exporters. Within the possible limit, the government can think of a further extension for repayment, said Fazlul Haque.

Meanwhile, BKMEA First Vice president Mohammad Hatem urged the government to stop harassment by VAT and Customs officials.

When the government is working hard to improve ease of doing business, some of the officials are making the business process harder and unnecessarily harassing the exporters, he said.

BGMEA vice president SM Mannan Kochi and former senior vice president Faruque Hassan and BKMEA director Fazle Shamim Ehsan were present among the others. 

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