The government would try to settle the issue of yarn prices between the knitwear exporters and the spinners through an amicable intervention talking to all the stakeholders, commerce minister Faruk Khan said on Tuesday.
The issue should be amicably resolved as knitwear exporters alleged that on the plea of a record rise in prices of cotton in the international market the local spinners were increasing yarn price irrationally.
At a meeting with leaders of the knitwear exporters on Tuesday, Faruk Khan said the government would soon sit with the stakeholders, particularly with the spinners, for ensuring a rational price of year.
The BKMEA leaders alleged that on the pretext of fresh rise in cotton price in last two weeks, spinners irrationally pushed up yarn prices by 60 cents per kilogram.
In a detailed letter submitted to the ministry, BKMEA presented per kilogram of 30-count yarns—widely used by T-shirts and other light knitwear exporters—was quoted on Tuesday at $5.1 against $4.5 just two weeks back.
The BKMEA records showed that 30-count yarns sold per kilogram at $ 3.2 in January and continual rise on cotton price in global market pushed up the price to $3.5 to $3.7 level by the end of September.
BKMEA claimed that banking on fresh hikes on international cotton price, the spinners raised the price of 30-count yarn to $4.2 to $4.5 level by mid-October and the price was raised further in the last two weeks.
AKM Selim Osman , the BKMEA president, claimed that recent hike on yarn prices forced many small and medium sized knit units to halt their production.
‘Nearly 20 per cent of SME knit units have halted their operation or they will do that very soon,’ said Osman.
Idle hours and loss in the process due to frequent disruptions in gas and power supply had already increased the cost of production in knitwear units in the previous months, said Osman. ‘Now yarn crisis is driving many knitters out of business.’
Representatives of the knitters demanded unrestricted imports of yarn with speedy logistic and clearance facilities for import of yarn through the land ports.
They also urged that government to increase cash incentives on knitwear exports to 10 per cent from the existing 5 per cent so that exporters can offset the impacts of yarn price rise.
New Age, Wednesday 27/10/2010
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