Due to the impact of the world economic recession and the depreciation of the Indian rupee, Bangladesh’s spinning industry is in trouble, and there is a large backlog of yarn in the domestic market. India has always been one of the important sources of yarn for Bangladesh. The recent sharp depreciation of the Indian rupee has caused the export price of Indian yarn to fall, putting great pressure on local yarn sales in Bangladesh. The current price of 30-count cotton yarn in the Bangladeshi market is US$2.75-2.80 per kilogram, while the price in India is US$2.55. In addition, India is one of the major cotton producers, while Bangladesh is a net importer of cotton (from Uzbekistan and other CIS countries), making it very easy for India to “dump” its yarn. The lack of continuity in Bangladesh government policies is also one of the important factors affecting the development of the spinning industry.
According to statistics, a total of 28 new spinning mills and 442,000 spindles were built in Bangladesh in 2007, and a total of 43 new spinning mills and 944,000 spindles were built in 2008. Currently, there are 341 spinning mills in Bangladesh with an annual yarn production capacity of 1.6 billion kilograms and a total investment of US$5.1 billion. The demand for yarn in Bangladesh in fiscal year 2008 was 789 million kilograms, and the demand in fiscal year 2007 was 658 million kilograms, with an average annual growth of about 21%.
