Commitment to check unusual yarn price hike in local market

Industry Desk:Local yarn manufacturers have decided to check unusual price hike of yarn in the domestic market, making commitment not to increase yarn prices quoted in the latest proforma invoices (PI).
The assurance came at a meeting of the leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Terry Towel & Linen Manufacturers & Exporters Association (BTTLMEA) with Bangladesh Textile Mills Association (BTMA) held last night (10 August), said a press release yesterday.
BTMA President Mohammad Ali Khokon assured that yarn manufacturers would keep (PI), issued on August 10 at the latest, valid for 15 days which they were keeping in a very short time and such a short time limit was not sufficient for taking business from buyers. PI is an estimated invoice sent by a seller to a buyer in advance of a shipment or delivery of goods.
They also agreed to hold another meeting next Monday to have discussion over reducing yarn price.
BGMEA President Faruque Hassan demanded that 30s yarn price goes down immediately keeping it consistent with international market to save the industry and keep the industry’s competitiveness and survive in this crucial time of business.
It was also decided in the meeting that an arbitration cell will be revived. The cell will consist of BGMEA, BKMEA, BTTLMEA and BTMA representatives to resolve all PI related and other issues on a fortnightly basis.
BGMEA President Faruque Hassan, BKMEA President A.K.M. Salim Osman, MP, First Vice President Mohammad Hatem, BTTLMEA Chairman M Shahadat Hossain and BTMA President Mohammad Ali Khokon took part in the meeting. Former BGMEA President Kutubuddin Ahmed, former FBCCI President A.K. Azad, former BTMA Presidents A. Matin Chowdhury and Tapan Chowdhury were also present at the meeting. Earlier, the apparel exporters expressed their worry over the continuous yarn price hike in the local market. The unusual hike in yarn price is impacting the competitiveness of RMG industry which is already passing a difficult time due to increase in production cost and fall in apparel prices.
Industry people said retail sales have grown sharply in the Europe and the US as stores are opening following mass vaccination. As a result, a lot of work orders are coming to Bangladesh. But the garment exporters cannot take all of the orders due to unusual increase in yarn prices in the domestic market.
So, orders would be shifted other competing countries if Bangladeshi exporters cannot take them, they said.
Cotton is the main feedstock of the export-oriented garment export industry in Bangladesh as 75% of the total exported garments are produced from cotton.
Bangladesh is the second largest cotton importer in the world. Hence, continuous price hike in such a crucial raw material like cotton/yarn is having serious impacts on garment industry.