Yarn price hits over $5/kg

Prices of yarn, the basic raw material of ready to wear apparels, have increased by 81 percent and is now selling at $5.25 per kilogram at the local market.

One kilogram of yarn (30-count) was selling at $2.90 during January of 2021 which shot up to $5.25 in February of 2022.  

To this end, a blame game has ensued between the garment manufacturers and yarn producers. Both the parties have also written formally to the commerce ministry to resolve their crisis.

The readymade garment exporters blame the yarn makers that they cannot bag the profit in peak business time due to high price of yarn in the local market though ‘it is much cheaper in the global market.’

However, the yarn producers blame the high yarn price on the inflated raw cotton price which they import from international market.  

In August, at a tripartite meeting both the parties had agreed upon to set the yarn price at $4.20 per kg for the following months. But, violating the decision, the yarn manufacturers are increasing the product’s price in the local market, blamed the garment manufacturers.  

“Cotton prices in Bangladesh depend on the import prices. But India, Turkey, and other yarn-producing countries locally source their cotton,” Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA) told Business Insider Bangladesh, recently.

Khokon said: “This is why those countries can sell yarn at low prices. However, our prices are not that high compared to theirs.”

Meanwhile, raw cotton suppliers could not maintain the commitment until the end of lead apparel production time. The global supply chain gets disrupted due to port’s uneven activities during Covid-19 pandemic.

“We don’t have the option to keep yarn price low as the raw cotton price has also increased in the global market. Besides, we are facing an uncertainty about yarn production due to inadequate supply of raw cotton. I think the Dhaka yarn market will experience a significant shortage of yarn. Then price will rise more,” Fazlul Hoque, vice president of, Bangladesh Textile Mills Association (BTMA), told the business Insider Bangladesh.   

Meanwhile, during July-December of 2021, import of yarn aggregated $2.47 billion as against $963 million in the corresponding period of the previous year, according to Bangladesh Bank.

Bangladesh yarn import registered an increase by 157 percent year on year while raw cotton by 66 percent during July-December of 2021.

“I have been importing yarn since August due to its higher price in the local market. Due to higher yarn price and its scarcity push the apparel makers to import yarn,” Muhammad Hatem Executive President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told the business Insider Bangladesh.  

Fazlul Hoque, said, “We are facing uncertainty for procrastination of inward shipment caused by container crisis at the ports. As the demand for yarn goes outrageously up, people having bonded warehouse licences began intensifying imports from global markets.”

India constitutes 32 percent of Bangladesh’s total yarn import, followed by Brazil 15 percent, Benin 12 percent and the United States 9 percent, respectively.