Apparel exporters worried about rising yarn prices

Though apparel export orders are pouring into Bangladesh amid the ongoing Covid-19 pandemic, manufacturers are now worrying about the increasing yarn prices in the local market.

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Garment Manufacturers and Exporters Association (BGM EA) and Bangladesh Terry Towel Manufactures and Exporter’s Association (BTMEA) expressed their concern over rising yarn prices, on Sunday.

“Yarn manufacturers are asking additional $0.90 to $1 for a kilogram of yarn than the international market rate,” Mohammad Hatem, first vice president of BKMEA, told the Business Insider Bangladesh, after the meeting.

Apparel makers use three types of yarn – card, combian and organic – to make garments for shipment. Of these, card yarn is the cheapest one and is now being sold at $4.20 per kg, $1.5 higher than what it was six months ago, said Fazlul Hoque, former president of BKMEA and managing director of Plummy Fashions, a leading green factory in the country.

Monsoor Ahmed General Secretary of Bangladesh Textile Mills Association (BTMA), who was not present in the meeting, said, “We are not foes. BKMEA is our main consumer. They (BGMEA and BKMEA) discussed their concerns.”

Md Mujibur Rahman General Secretary of BTMEA said, “We might invite them to let them know our concerns. I know this crisis will not be solved in through bilateral discussions. To resolve the ongoing yarn price hike, we need involvement of the government.”

“We have got enough orders but due to costly yarn, we cannot manufacture accordingly,” Mujibur said.

The BKMEA and BGMEA will hold a press conference on Wednesday to convey their concerns to the government and the BTMA.

Meanwhile BGMEA said in a press release on Sunday that apparel exporters are concerned over the rise in yarn prices in the local market.

They said retail sales grew sharply in the Europe and the US as stores are opening following mass vaccination there. As a result, a lot of work orders are coming to Bangladesh.

But unusual increase in yarn prices in the domestic market has made it difficult for them to entertain additional orders.

BGMEA President Faruque Hassan chaired a meeting at BGMEA office where heads of three leading trade associations were present and discussed their next course of action.

They said the local mills are increasing yarn prices every day and providing proforma invoice (PI) with a short time limit which makes it difficult to open LC in such a short time. Moreover, it takes around 15 days to confirm orders. As a result, apparel manufactures could not take many of the offered orders despite having capacities to manufacture apparels.

BGMEA claimed that many factories were taking orders under breakeven points only to stay in the business. Buyers do not increase apparel prices as they only look at Free-on-Board prices.