Foreign news on April 11, the Bangladesh Textile Mills Association (BTMA) recently called for a temporary suspension of cotton yarn imports in the garment industry to preserve foreign exchange reserves and increase added value.
Mohammad AliKhokon, president of the Textile Mills Association, conveyed this suggestion in a letter to the Governor of Bangladesh Bank. Exporters opposed to the proposal argued that the move would make them less competitive in global markets.
The above-mentioned textile mills association stated that 510 local textile mills can meet 70% of the cotton yarn demand of the export-oriented garment industry.
Khokon said that although factories have large stocks of raw materials due to falling demand, the export-oriented readymade garment industry imports large quantities of carded yarn and yarn through bonded warehouse facilities. Combed yarn, which costs a lot of dollars.
He said that if domestic cotton yarn is used, the added value will be as high as 60%, while the added value of using imported cotton yarn is only 30%.
Khokon urged the central bank governor to take steps to stop issuing back-to-back letters of credit for cotton yarn imports, saying Bangladesh was fully capable of producing cotton yarn.
Shahidullah Azim, deputy chairman of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the decision will lead to a domestic oligopoly as buyers will not be able to raise prices for garment items. price, which will cut into competition.
The knitwear industry, which sources most of its yarns and fabrics from domestic suppliers, also opposes any restrictions on such imports.
In addition, Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that domestic spinning mills cannot meet all the demand for yarn and fabrics from the export sector. .
Data from the Bangladesh Bank shows that the added value of the ready-made garment industry dropped to 54.38% in the 2021/22 fiscal year, compared with 64.32% in the 2018/19 fiscal year, mainly due to high imports of raw materials. .
