Garment manufacturers in Bangladesh are facing challenges on account of sudden rise in yarn prices in both global and domestic markets — according to exporters, yarn prices rose 40 per cent between December and June owing to increase in cotton price in the international futures markets — which has now emerged as a major impediment towards apparel export recovery.
Media reports maintained this citing the garment exporters, according to whom, the increase in yarn price in the local market is due to a host of reasons including abnormal rise in freight charge, cotton price hike and increase in utilisation capacity at the mill level after work resumption post protracted lockdowns even as they maintained that on 11 June, cotton was traded in the global market, between US $ 88.21 per pound and US $ 87.72 per pound, up from 14 December’s rate of US $ 72.65 to US $ 72.90 per pound, while World Bank Commodities Price Data on the other hand showed, in the January-March quarter of 2021, cotton prices soared 21 per cent year-on-year to US $ 1.99 per kilogram.
Consequently, widely consumed 30-count yarn, in the local market, was sold for US $ 4.25 to US $ 4.30 per kilogram very recently, which in December ranged from US $ 3.9 to US $ 4.
Meanwhile, speaking to the media, Additional Secretary of the Bangladesh Textile Mills Association (BTMA) Monsoor Ahmed maintained that between April and June, demand for cotton rose 163 per cent as compared to the corresponding period of the previous year as local mills either enhanced their capacity or have went for highest use of the installed capacity because of the rise of demand for yarn even as he underlined that freight rate which was US $ 1,000 per 40-foot container in December increased to US $ 3,000 in June.
