Yarn prices that witnessed a hike of more than 20 percent one and a half months back have emerged as a major concern for apparel exporters.
Textile millers' data shows the widely used 30-count yarn in Bangladesh, was selling at $3.20-$2.95 a kg yesterday. The previous rates hovered around $2.80-$2.90 a kg.
Industry insiders see the situation as a result of higher domestic demand for the item and surging prices of raw cotton on the international market. Also, yarn makers blame the increasing cost of production, as they had to go below their capacity because of a scarce supply of gas to their factories.
Yarn users -- apparel makers and exporters -- consider the item's price spiral as a blow to their business at a time when foreign buyers are placing more orders, buoyed by the signs of global economic recovery.
Abdul Hai Sarker, president of Bangladesh Textile Mills Association, said now raw cotton sells at 78-85 cents per pound on the international market, showing a 20 percent rise in its prices.
"Moreover, production cost increased due to inadequate pressure of gas in factories. Gas scarcity has forced us to go below our capacity,” Sarker told The Daily Star. However, he expects an improvement in gas pressure on the introduction of rationing system.
Abdullah Al Mahmud Mahin, managing director of Mahin Group, alleged that local spinners now make windfall profits in an excuse of a hike in raw cotton prices on the international market.
"It is true that global market price soared, but the spinners imported such cotton at least four months ago at a lower rate. Then why are they taking an extra price from users?" Mahin argued.
A senior official of DBL Group, a bulk consumer of yarn, however, sees the situation in a different way. Pointing to the fact that 30-count yarn did not show any upward trend over the last two or three days, he said the price may fall in near future.
Meanwhile, knitwear makers' trade body expressed concern over the yarn price rise. "We are under pressure for the price hike at a time when apparel demand is picking up globally. Yes, the pricey yarn is a concern for us," said Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association.
Source: thedailystar.net
