Duty-free yarn import: Commerce ministry too writes to NBR

The Ministry of Commerce has requested the National Board of Revenue to consider the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association’s (BTTLMEA) plea to import yarn without duty as its price in the local market is rising abnormally.

The association wrote a letter to the commerce ministry and NBR on 10 October 2021 with a request to permit duty-and-bond-free import of 6-10 count yarn. But the revenue board is yet to reply.

“We have sent the application of the BTTLMEA on import of yarn to the NBR and we will sit with the revenue board to find a way-out soon,” said AHM Shafiquzzaman, additional secretary (import) of the commerce ministry.

Earlier, the BTTLMEA tried to persuade the textile millers to reduce the yarn price following its price fall in the international markets.

Shafiquzzaman said they claim that local yarn makers are reluctant to manufacture 6-count to 20-count yarn because of its lower demand. Instead, they are interested in manufacturing highly demanding 30-count yarn, used by knit factories, he noted.

Currently, most of the terry towel factory owners are unable to take large export orders due to the scarcity of yarn and its unusually high price.

“Our members are very frustrated about the situation. Now they want to import it,” said Shahadat Hossain, president of the BTTLMEA.

“Since the yarn makers are not interested in manufacturing low-count yarn which is used in making towels, we have written to the government seeking import permission,” he told the Business Insider Bangladesh on Sunday.

In fiscal 2020-2021, terry towel shipments fetched $1.16 billion and $1.22 billion has been projected for the FY22. In the six months of the fiscal year the sector fetched $715.95 million, up by 31 percent export year-on-year.

But the rising yarn prices are posing a threat to them. Prices for yarn in the local market rose by 60 to 70 percent. Moreover, the local millers cannot deliver the raw materials at the lead time.

In Pakistan, the current price for a kilogram of 10-count yarn is $1.21 and $1.34 per kg for 16-count which is $2 per kg for 10-count and $2.70 per kg for 16-count in the local market.

Though this sector accounts for only $1bn out of $ 41bn export earnings, the effective contribution to the national economy is much higher because of the high ratio of domestic value addition, according to the BTTLMEA.

The sub-sector has directly employed over one lakh men and women, across the country.