Yarn consumption doubles in six years
Image collected
Yarn consumption doubled over the last six years because of high demand from domestic garment manufacturers and high volume of garment export, according to industry insiders.
In fiscal 2012-13, local knitters and weavers consumed 10 lakh to 11 lakh tonnes of yarn. Last year, the amount stood at 22 lakh tonnes, said Monsoor Ahmed, secretary to the Bangladesh Textile Mills Association (BTMA), the platform for the primary textile sector.
Between fiscal 2012-13 and 2018-19, Bangladesh’s garment export increased nearly 10 percent.
Last fiscal year, apparel shipment from Bangladesh was $34.13 billion, which was $21.51 billion in fiscal 2012-13, according to data from the Export Promotion Bureau.
Despite a lot of internal and external shocks, garment shipment from Bangladesh maintained robust growth over the last seven years because of competitive prices and flawless supply of yarn and fabrics, which reduced lead time significantly, exporters said.
Internal shocks include the two deadliest industrial accidents including Tazreen Fashions fire in November 2012 and Rana Plaza building collapse in April 2013.
The sector also witnessed a setback in shipment because of elections in some major markets, financial crisis in some economies and Brexit. However, the sector could bounce back.
On the other hand, there were some sunny sides for the local garment exporters like new export destinations such as Japan, India and China, where Bangladesh’s garment export has been growing at a faster rate in comparison to traditional markets like the EU, the US and Canada.
The local garment exporters have been receiving a lot of work orders because of the US-China trade war that compelled many international retailers and brands to come to Bangladesh. The consumption trend of yarn has also changed during this period, especially over the last two years, as imports are increasing for availability of cheaper yarn in India and China, said BTMA’s Ahmed.
“Previously, the import of yarn was not so high.”
Subsequently, spinners have lowered their production capacity to 77 percent from 90 percent over the last six months. Currently, the yarn consumption trend in Bangladesh is a 50-50 mix of imports and local ones.
“So the country’s main export earner is depending more on imported raw materials, which is a worry for us. If the situation continues, we will be in trouble,” Ahmed said.
Lower production of yarn by local spinners means cotton consumption by Bangladesh also declined. Last fiscal year, Bangladesh imported nearly 7.7 million bales of cotton, which was 8.2 million bales in fiscal 2017-18.
A Matin Chowdhury, managing director of Malek Spinning Mills, a leading spinner, mentioned three specific reasons for the losing competitiveness by local spinners to the cheap imported yarn.
They are: 50 percent hike in the gas price, 2 percent devaluation of local currency against the greenback and wage hike in the garment sector that put the manufacturers in a tight spot.
“Our stockpiling of yarn is increasing every day,” Chowdhury told The Daily Star by phone.
The highest consumer of yarn is the knitwear sector in Bangladesh as the local 450 spinners can supply more than 80 percent of the raw materials needed by the manufacturers and exporters.
The local knitwear sector consumes more than 16 lakh tonnes of yarn in a year, the spinners said.
Source: https://www.thedailystar.net
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