The country’s textiles and apparel export sector has been jolted by a fresh hike of raw cotton price in the international market that caused a corresponding rise in the prices of yarn in the local market.
Quoted at $ 1.22 per pound in New York commodity exchange, raw-cotton price index on Friday reached the record highest, industry sources said.
Price of widely used 30-count yarn came closed to $5 a kilogram [2.2 pounds] in the local market, up by 25 cents just in three or four days and more than 20 per cent in a couple of months.
Industry insiders said many spinners on Saturday sought $ 4.9 for a kilogram of 30-count yarn, which are widely used by T-shirt makers.
‘It’s just a terrible situation... the industry has never seen such high prices,’ Fazlul Haque, a former president of Bangladesh Knitwear Manufacturers and Exporters Association, said.
The 30-count yarn now costs between $ 4.7 and $ 4.9 per kilogram while just a year ago its price varied between $ 3.5 and $ 3.6, recall industry insiders.
Fazlul Haque said small and medium sized knitters are seeing red with sharp rise on yarn price. ‘Many of the SME knitting units will eventually die being unable to raise price of apparels to keep up with yarn prices.’
More than three-fourths of Bangladesh $ 7 billion dollar worth of knitwear export earnings come through shipments of T-shirts and sweaters that are made of cotton yarn.
Woven or cut-and-sew apparel makers have also been hit hard by the increased cotton price as their major products like jeans and denim wears are mainly made of cotton-based fabrics.
Showkot Aziz Russell, a director of Partex Group that runs several spinning units, said local yarn manufacturers have been just helpless as they are bound to follow global raw-cotton price trend.
‘Given last week’s import price of raw-cotton, it is in no way possible to keep price of yarn bellow the level of $ 4.7 per kilogram,’ said Russell.
He said the latest index price of raw cotton at $ 1.22 per pound means landing cost of cotton in Bangladeshi is at least $ 1.4.
In the past three months, cotton has rallied from a low of 73.01 cents a pound after adverse weather in Pakistan, India and China delayed or reduced the size of the crops there.
‘Local spinners depend fully on imported raw cotton so it is logical that price of the end product follows international cotton market,’ argued Russell.
‘Any blame game with yarn price is useless, the industry rather should make marketing strategies following the cotton reality,’ he added.
The leading spinner however said the government should become more serious in ensuring adequate gas and electricity supply to the spinning units so that their cost of production does not rise further due to idle hours.
-New Age, Sun, 17/10/2010
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