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Bangladesh - Corporate - August 23, 2021

MoU signed among three parties

Stabilizing yarn price

Staff Correspondent:The maximum price for the 30 most used single card in the garment sector will be $4.20 per kg of yarn. As a result, spinning mills that are selling yarn at slightly higher prices need to be reduced. However, if the cotton price index exceeds 100 in the international market, the price of yarn will go up again. And if the index drops to 75 or below, then the price of yarn will decrease. The cotton price index has been hovering between 93 and 96 for several days now.
The decision was taken at a meeting between the leaders of BGMEA and BKMEA, two garment industry owners’ organizations, at a restaurant in Banani on Saturday night.
Former BGMEA president and Envoy Group chairman Qutbuddin Ahmed, BGMEA president Faruque Hassan, BKMEA president AKM Selim Osman, Vice president Mohammad Hatem Ali, BTMA president Mohammad Ali and others were present on the meeting.
After the meeting, BTMA president Mohammad Ali told that there have been a few positive decisions regarding yarn prices. Finally a memorandum of understanding was signed between the three parties. If the price of cotton goes up or down in the future, the leaders of the three organizations will meet and take a decision.
On the other hand, BGMEA president Faruque Hassan told that the PI’s term has been changed from 7 days to 15 days in the previous meeting held on August 10. That has been put into effect in Saturday’s meeting. For the time being, it has been decided to keep the price of yarn at $4.20. Those who were selling yarn at a slightly higher price will have to reduce it a little. And those whose yarn cost 4 dollars 20 cents, they will keep the same.
In the first week of this month, the owners of the garment and textile sector suddenly came face to face with the rising price of yarn. Later, a meeting was held on the night of August 10 with the mediation of the top businessmen. Apart from BTMA, BGMEA, BKMEA, leaders of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA) were also present.
At that meeting it was decided that the price of yarn would not increase even 1 cent for the time being. There will be a committee comprising leaders of four business organizations – BTMA, BGMEA, BKMEA and BTTLMEA to determine the maximum price of yarn.
Three days after the meeting, BGMEA president Faruque Hassan wrote a letter to the finance and commerce minister and NBR chairman seeking opportunities to import yarn and other raw materials under bond facility through Benapole and other land ports, especially Bhomra and Sonamasjid, to keep the factory’s production and export activities uninterrupted.
He also wants an opportunity to bring the goods of a purchase order in a few steps in the case of importing yarn through Benapole and other approved land ports. A day later, BTTLMEA chairman M Shahadat Hossain wrote a letter to the finance minister and commerce minister asking for the opportunity to import 8-20 counts of yarn with the same facility. Last Thursday, the BTMA president sent a counter letter to the NBR chairman. He claimed that lifting the tariff barrier on import of yarn through land ports would hurt the domestic textile sector.
According to BTMA leaders, the price of cotton in the international market has increased by 46 percent in the nine months from last December to August this year.
In contrast, the price of yarn in the country’s market has increased by 36 percent. The price of yarn has been selling above four dollars since last March.

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