Import of raw cotton, yarn rise amid Covid-19 pandemic

Rising shipment orders for various apparel products have pushed the demand for yarn and cotton in the recent months in Bangladesh.

Bangladesh Bank data show, import of yarn increased by 82.35 percent and raw cotton by 29.72 percent, respectively, in July.

According to BB data, Bangladesh imported yarn worth over $329 million in July this year, up from $180.7 million in July last year.

On the other hand, some $285 million worth of raw cotton has been imported this July, up from $219.7 million for the same time a year ago.

Readymade garment industry---the highest foreign currency earner, which consumes the most of the yarn in the country---is now getting huge work orders as the lockdown has been waning globally. Industry insiders said as Covid-19 situation improved in the developed countries, the demand for yarn is simultaneously boosting, resulting in higher consumption of both cotton and yarn.

“Not only in Bangladesh, but also the demand for cotton has expanded globally despite the pandemic. Moreover, raw cotton prices also hiked in the international market. Both quantity of imports and prices have spiraled in the local the market too,” Muhammad Ali Khokon, President of Bangladesh Textile Mills Association (BTMA) said.

raw cotton prices shot up by about 100 percent compared with the previous year, while organic cotton prices almost rose by 200 percent. Combed cotton (85% cotton) price was $0.60 per kilogram in last June which is now above $1.00, he told the Business Insider Bangladesh over WhatsApp from a foreign country that he was visiting.

“In addition, a diminishing production of cotton was the pivotal reason for its price hike. Our local yarn users are speculating that the millers are increasing the prices willingly which is not true,” he said.

According to the National Board of Revenue (NBR), 59.72 metric tonnes of cotton were imported this July.

Besides, imports of garment accessories have also surged. Imports of textile and articles thereof have risen from $442mn to $473mn, staple fiber from $63mn to $79mn and dying and tanning materials from $55mn to $67mn, as per the central bank.

In the last couple of months, the garment makers and the spinners were throwing mud to each other over the yarn price. To settle the matter, the Ministry of Commerce had convened a meeting on Sunday.

As yarn prices grew abruptly, the apparel makers wrote to the Ministry of Commerce for obtaining the permission to import yarn. There has been no decision on the import, yet.