Al Amin :
The cotton, key important textile raw material, prices are likely to increase further as the cotton index rose to $1.35 per pound which was $1.25 one week ago.
The rise in cotton prices is driving up production cost further for the country’s readymade garment producers.
On the other hand, the RMG makers are also failing to collect import documents for fresh lockdown in several parts of China, which led to delay in release imported raw materials, the apparel makers said.
Mohammad Hatem, Executive President of the BKMEA, told The New Nation, “The country’s garment exporters are facing difficulties in the shipment of apparel products for increasing production cost significantly in recent times.”
“Additionally, import of raw materials from China is hampering for imposition lockdown in several parts in China. We are failing to release raw materials for delaying import documents,” he said.
“This will also delay in export proceeds,” the BKMEA leader said.
The surge in cotton price has reached at more than a decade high in global markets due to the Russia-Ukraine war, abnormal hike in freight charge and drought in the US, the sector insiders said.
The price of the plant fibre reached $1.35 per pound on the key US futures contract on Friday, the highest since July 2011.
Even before the Russian-Ukraine war, the cotton had surged in the global market for increasing demand in the wake up reopening of economies after the pandemic-led lockdowns.
Because of the drought in some cotton-growing regions in the US, price hike of petroleum in the global markets and the high volume of cotton purchase by China pushed up the price of the white fibre by 9.09 per cent in the past month.
Following this, the production cost of garment exporters will go up further since the country is fully dependent on imported cotton to feed its main export earning sector.
Local growers can supply less than 2 per cent of 9 million bales of cotton consumed annually in the country, forcing the country to spend nearly $3 billion to import the raw material for the growing apparel industry.
Importers and millers said if the Russia-Ukraine war prolongs, the price of cotton would jump further. This will ultimately increase the price of yarn in the local markets, which will raise the cost of production for garment manufacturing.
Fazle Shamim Ehsan, Managing Director of Fatullah Apparels, alleged that the price hike of yarn in the local markets over the last one year as the thread’s price has rocketed by nearly 60 per cent in keeping with the rise in demand for garment items in the western world following the improvement in the pandemic situation.
Mohammad Ali Khokon, President of the Bangladesh Textile Mills Association (BTMA), said if the buying price of cotton goes over $1.35 per pound, another $0.20 will have to be added to the total price because of the freight charge and other variable costs before they enter the mills.
