BTMA Requests Ban on Cotton Yarn Imports for Readymade Garment Industry

Mumbai, 12 APR (Commoditiescontrol):The Bangladesh Textile Mills Association (BTMA) has requested the Bangladesh Bank to impose a temporary restriction on the import of cotton yarns for the readymade garment industry. In a letter to BB governor Abdur Rouf Talukder on April 3, BTMA President Mohammad Ali Khokon said that the country's spinning mills have stockpiles of the item and a temporary suspension on imports would help retain foreign currency.
The association has also demanded an interim instruction to the export-oriented readymade garment factories to procure at least 70 per cent of their total cotton yarn demand from local spinning mills under back-to-back letters of credit.
According to the BTMA president, 510 spinning mills in the country have 3,600 million kilograms of cotton yarn production capacity, and they could meet 70 per cent of the demand for the items by the export-oriented garment industry. He added that a huge amount of export-quality carded and combed yarns remains unsold in local mills, whereas the export-oriented RMG sector imports the items in large quantities under bonded warehouse facility by spending foreign currency.
According to Khokon, using local yarns to produce apparel would result in value addition of 55-60%, whereas using imported yarns would only add 30%. He also believes that if the central bank enforces this policy, it will help address the dollar crisis while alleviating the liquidity crisis faced by local spinning mills due to their excess yarn stockpiles.
Mohammad Hatem, the executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, has opposed the BTMA's proposal, stating that the import of yarns should not be suspended as local spinners are unable to meet the demand for specialized products. Furthermore, Hatem argued that it would be illogical to ban imports as buyers often nominate the country from which raw materials should be imported to meet their requirements.
Hatem also alleged that knitwear exporters usually procured cotton yarns from local mills to maintain lead time for export shipments, but in some cases, the price was 30-50 per cent higher than the imported yarns.
The proposal from the BTMA has sparked a debate among textile industry stakeholders, and it remains to be seen whether the Bangladesh Bank will impose a temporary restriction on cotton yarn imports.
(By Commoditiescontrol Bureau: 09820130172)