Textile millers and apparel manufacturers fixed yarn prices on Saturday night, lowering prices slightly
The amicable end of the chaotic situation created by the frequent rise of yarn prices signals the beginning of much-needed cooperation among the country's apparel and textile sectors, according to industry insiders.
Textile and apparel are complementary industries, so any chaos between them will tarnish the image of the country in front of buyers, who might then take undue advantage of the situation, they added.
Earlier, on Saturday night, the textile millers and apparel manufacturers fixed the yarn prices, bringing down the price of yarn slightly.
According to the newly fixed price, the ceiling of 30s carded yarn has been set at $4.20 per kg, while that of 30s combed yarn has been set at $4.50 per kg.
However, both parties will sit again to fix the prices if cotton price surpasses $1 per pound in the international market (Cotton Index 100) and it will be kept the same if the price remains at 85 to 100 cents (Cotton Index 85-100) per pound.
Also Read - Chaos over yarn price settled, no hike for now
The price will be reduced through a meeting if the cotton price falls below 85 cents.
Currently, the price of cotton in the international market is fluctuating between 93 to 96 cents per pound.
The decision was taken on Saturday at a meeting of top leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA).
BGMEA President Faruque Hassan told Dhaka Tribune that they had reached an agreement by fixing the yarn price in discussion with the textile millers on Saturday night.
“We have fixed the price of yarn at $4.20 per kg if the cotton price remains under $1 per pound in the international market, but if it surpasses $1 per pound, we will sit again to fix the new price limit,” he added.
The BGMEA president also said that this will bring a positive sign for both apparel and textile industries of the country and that the decision was needed to keep the country's market stable.
Mohammad Ali Khokon, president of the BTMA, said: “We agreed to set a price ceiling as apparel and terry towel manufacturers were demanding lowering the prices. We will be able to supply the yarn at these fixed prices.”
Faruque Hassan also said that local procurement of yarn from the domestic market has given some advantages to the manufacturers.
However, unusual hikes may force them to find alternative markets, he added.
According to the industry insiders, 70-80% of the demand for yarn are met by local spinners.
Bangladesh imports 20-30% of yarn from India, Pakistan, Indonesia, and Turkey and most of them are specialized varieties.
Rising yarn prices for several months had created a chaotic situation for textile millers and apparel exporters.
Apparel and terry towel exporters alleged that the spinning millers unfairly and abnormally increased yarn prices which put the exporters in a difficult situation for the last seven to eight months.
Also Read - Rising yarn prices, apparel sector in chaos
However, textile millers denied the allegation and claimed that they are not hiking prices intentionally.
On August 10, the ongoing chaos over high yarn prices between textile millers and apparel exporters was settled amicably, with no price hike planned.
The decision was taken at a joint meeting of the BGMEA, BKMEA, BTTLMEA, and the BTMA.
But after only a few days of the meeting, on August 14, the country's apparel manufacturers sent a letter to Commerce Minister Tipu Munshi asking him to allow partial shipment in all the land ports of the country for importing raw materials needed by the sector.
They also demanded to relax the conditions of importing yarn, cotton, fabrics and other raw materials through these land ports.
But textile millers expressed worries over the new proposal.