Yarn import rises, fabrics fall

Increased yarn imports by Bangladesh decreased the country’s import of fabrics in the outgoing year of 2021, according to the latest United States Department of Agriculture (USDA) report.

Using Global Agricultural Information Network (GAIN) database, the report, published on December 13, was prepared by USDA's Foreign Agricultural Service Dhaka Post.

Through the first nine months of Calendar Year (CY) 2021, the value of cotton yarn imports was up by 126 percent to $1,426 million over the same period in CY 2020, the report said citing Trade Data Monitor (TDM) data.

Of the total yarn import to Bangladesh, India (32 percent) exported over $1,176 million of cotton yarn, followed by Brazil (15 percent), Benin (12 percent), and the United States (9 percent).

Exporting Indian cotton is more viable for Bangladesh as transportation and logistics are cheaper as compared to other origins, with shorter shipment times due to geographic proximity.

During the same period, total fabric imports also dropped to $1,178 million, which is 36 percent lower than in the same period last year. The significant decrease in fabric imports in CY 2021 is linked with increased yarn imports in the same period.

The USDA also forecast a higher cotton production and consumption for Marketing Year (MY) 2021-22, 1,51,000 bales with total consumption at 8.81 million bales.

Due to the high international price of cotton, local spinning mills will consume more out of stocks.

The pressure of buying domestically will also increase as the country’s ready-made garments exports increased 28 percent to $28.5 billion in the first 10 months of CY 2021, as compared to the same period in CY 2020.

The report forecasted the country’s cotton ending stocks at 2.4 thousand bales, approximately 4 percent lower than the USDA official forecast.

The value of Bangladesh’s yarn exports in the first nine months of CY 2021 increased by 160 percent to $27.35 million as compared with the same period in the previous year.

Meanwhile, Bangladesh’s garment manufacturers in MY 2020/2021 only imported 430 bales of raw cotton from China, while Bangladesh was China’s largest market for yarn and fabrics made of cotton.

With cotton worth $4.9 billion imported last year, Bangladesh is the world’s second largest consumer of cotton after China.

Cotton grows in 22 out of 64 districts in Bangladesh, covering 0.55 percent of Bangladesh’s 8.1 million hectares of cultivable land.

The report noted that the Ministry of Agriculture’s Cotton Development Board aims to increase cotton production in Bangladesh from approximately 2 percent of total demand to 8 to 10 percent by bringing new land into cultivation.