Garment manufacturers, who could not settle many orders in the previous two or three months due to the record and continuous rise of the price of yarn, are seeing that their buyers are waiting for a further fall of the price before placing their orders.
The prices of cotton and yarn greatly influence the business of Bangladeshi garment exporters whose annual shipments, of which over 80 per cent are cotton clothes, amount to over $16 billion.
‘Garment industries are passing through a critical period because of the impact of the fluctuations in cotton and yarns prices in recent months,’ said Fazlee Ehsan Shamim, managing director of Fatullah Textile.
Because manufacturers could not settle fresh orders in March-April, many factories will remain idle in June-July or later months, said Shamim, also a former director of the Bangladesh Knitwear Manufacturers and Exporters Association.
However Shamim, whose knitwear unit employs around four thousand workers, hopes that the industry will start seeing settlements of an increased amount of large orders within a month or two when the prices of cotton and yarn have stabilized.
Fakir Kamruzzaman Nahid, managing director of Fakir Fashion, one of the country’s largest knitwear exporters, is also of the opinion that the woes of garment exporters, caused by the high prices of yarn, are coming to an end.
Fakir said that major importers had curtailed around 20 per cent of their seasonal procurements from Bangladesh in the previous couple of months as the record rise in the price of cotton pushed up the price of yarn to an unusually high label.
Industry sources said that the price of 30/S category yarn rose to $7 per kilogram in February-March this year.
Nahid pointed out that due to record rise on yarn price Bangladeshi exporters lost good numbers of orders as well the profitability, which had been scheduled for coming winter sales.
Price of this category of yarn, which is used for producing T-Shirts, Polo Shirts and other categories of basic knitwear, had increased at least 50 per cent within six months.
Nahid of the Fakir Group, that employs 15,000 workers in several units, said that buyers are preparing to increase their orders since the price of yarn has declined to $5 per kilogram.
‘I am sure that a huge number of orders will start rolling in within a month or two as Bangladesh is the most competitive source in the global garment sector,’ said Nahid.
A senior executive at the Dhaka sourcing office of a European apparel retailer said that the record hikes of the price of yarn caused a sharp rise in the prices of cotton clothes, resulting in a decline in their sales.
‘With cotton price falling, the retailers and importers are redesigning their procurement and sales strategies,’ said the executive. ‘Bangladesh should gain most by increased exports if cheaper cotton boosts sales in the apparel shops of the EU and US.’
News: The New Age, Sun, 15/05/2011
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