Insiders said that the country’s domestic textile mills will be adversely affected if the government allowed yarn import via land ports
Textile millers are now worried over the new proposal brought forward by apparel manufacturers to import yarn, cotton, fabrics, and other raw materials through land ports.
Industry insiders said that the country’s domestic textile mills will be adversely affected if the government allowed yarn import via land ports, and also if they permitted partial shipments of the apparel industry's raw material under the same letters of credit (LCs.)
According to leaders of the Bangladesh Textile Mills Association (BTMA), they had a meeting with its stakeholders recently and discussed the new dilemma.
However, one of its officials said that they will reach out to the National Board of Revenue (NBR) and relevant ministries to prevent such a scenario.
But senior BTMA leaders have declined to comment on this matter.
Fazlul Haque, vice-president of the BTMA and an attendee of their internal meeting, told Dhaka Tribune that imports of raw materials for apparel have been going on through only Benapole port for a long time now.
“Hence, here is no reason to ask for import permission through new ports,” he also said.
“This will cause two problems simultaneously - the domestic industry will be impacted and there will be a possibility of a hefty amount of yarn entering the country under false declarations, which in turn will flood the domestic market,” he feared.
Haque also pointed out how other land ports do not possess the necessary infrastructure similar to the one in Benapole.
Moreover, the security system at most ports is very low, which may create an opportunity to import yarn of false declarations, the BTMA vice-president also said.
“We have already discussed the matter among ourselves but have not decided to approach the government yet. But we think that the government is well informed about the consequences the local textile industry will suffer if yarn imports are allowed through all land ports,” he added.
BTMA leaders who were present at the meeting said that Imports have been going on through Benapole for so long, now there is no practical reason to approve import through Sona Masjid, Bhomra, and other landports.
They are concerned that if this is permitted, it will be impossible to stop the tide of imported products via false declaration in the country's market, which will affect the domestic mills.
They also said that the established local textile mills which received a lot of investment for expansion and sustainability will incur losses.
BTMA President Mohammad Ali Khokon was also present at the meeting.
However, a BTMA director, requesting anonymity, said that the yarn market has been in turmoil for the last one year.
To overcome this situation, import of essential raw materials of the apparel sector can be permitted for a short duration, only until the crisis is solved.
Meanwhile, the rising price of yarns in the country for several months now has created a chaotic situation for textile millers and apparel exporters.
Apparel and terry towel exporters allege that the spinning millers unfairly and abnormally increased yarn prices which put the exporters in a sticky situation for the last 7-8 months.
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 hikes planned for now.
The decision was taken at a joint meeting of apparel and textile sector organizations – 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 the Commerce Minister Tipu Munshi asking him to allow the partial shipment in all the land ports of the country in importing raw materials for the sector.
They have also demanded to relax the conditions of importing yarn, cotton, fabrics and other raw materials through the recognized land ports.