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A roadmap towards sustainable cotton farming in Bangladesh

Export oriented readymade garments industry – the main driver of demand for yarn:

Bangladesh is the world’s second-biggest apparel exporter after China. Readymade garments export earns more than 81% of the export earnings of Bangladesh and therefore is a vital part of Bangladesh’s export and economy.

roadmap-sustainable-cotton-farming-Bangladesh
Figure 1: Bangladesh needs to implement a long-term sustainable cotton policy and a model to ensure profitability and sustainability of cotton farmers.

Unfortunately, almost all raw materials (Cotton, Manmade fiber, filament, etc.) and chemicals, machinery, spares and consumables are imported therefore retention of foreign currency through the export of readymade garments is not more than 20%. Having a portion of domestic raw material is also strategically important as it increased value addition, saves cost, minimize lead time, increases foreign currency retention and creates local business and employment opportunity.

Bangladesh-RMG-export
Data Source: Export Promotion Bureau Compiled by BGMEA.

The fashion industry is fast-changing and in order to execute the sample development and orders on time, backward linkage plays a vital role by facilitating garments delivery goods within minimum lead time, maintaining the right quality. The benefit of investment in backward linkage industries is already reflected in cotton-based knit and woven sectors that are growing, and becoming internationally competitive gradually.

A snapshot of the primary textile sector (PTS) of Bangladesh

The primary textile sector consists of spinning, knitting, weaving fabric manufacturing and dyeing and has supported well to supply quality yarn and fabric in a timely manner to cater to the need of the export-oriented readymade garments industry. The total investment in PTS in Bangladesh is USD 12 billion. The dyeing/printing/finishing capacity is 4,000 million yards while the fabric manufacturing capacity of knit and woven is 3,690 million yards and 4,100 million yards, respectively.

Bangladesh-primary-textile-sector-2021
Figure: Bangladesh’s primary textile sector scenario. Source: BTMA, November 2021.

Demand for 80% and 40% of knit and woven fabrics required by the export-oriented garments industry is supplied by the primary textile sector (PTS) while 90% and 60% of yarn is supplied by export-oriented local spinning mills.

Bangladesh-yarn-demand-supply

The primary textile sector is vertically integrated in cotton but not in synthetic yarn and fabric. Value addition in knit fabrics is more while woven is import-dependent. ‘Two-stage transformation’ would require development in backward linkage in synthetic fabric within 2026 (With three year grace period of 2029) which would also create scope for new investment in synthetic dyeing & finishing, fabric, yarn and fiber.

demand-supply situation of yarn in Bangladesh

The demand gap of yarn is mostly for synthetic, specialty and woven yarn. Woven garments is mostly based on imported fabric, so is active and sportswear fabric of knit garments export.

It is interesting that although the share of cotton with respect to global production of fiber is only 24.2% (As per Textile Exchange Preferred Fiber & Materials Market Report 2020), global demand for cotton for spinning and weaving is 55% (As per ITMF 2016 Report), in Bangladesh the share cotton is 89% (As per BTMA) of the total fiber imported for spinning.

BTMA-member-mills-import-raw-material-2020
Figure: BTMA member mills import of raw material in 2020.

As per BTMA, the annual cotton requirement of the spinning industry in the future would remain roughly 8-10 million bales and mostly imported from different countries like India, Africa, USA, Australia, CIS, etc.

Table: Import of raw materials for spinning in 2020 (Source: BTMA)
S/L Description of raw material Import (In Mil kg) % of total import
1 Cotton Fiber 1,401 89.0%
2 PSF Fiber 97 6.2%
3 Viscose (VSF) Fiber 71 4.5%
4 Modal/Tensile/Liocell Fiber 6 0.4%
TOTAL 1,575 100.0%

The yield of cotton in Bangladesh has improved significantly in recent years from 5-6 Mon per Bigha to 15-18 Mon per Bigha. Thanks to the Cotton Development Board and the active leadership of the current Executive Director.

Let us see a comparison of return on cotton, in comparison with other competing cash crops available to the farmers of Bangladesh in the bellow table:-

BD-cotton-farmers

From the above table, we can see that cotton has come to a reasonable level to be considered as a viable option to farmers as a cash crop. But to make cotton a long term sustainable option with the changes in the important aspects for farmers, we need to look deep into its different aspects; i.e. the different stakeholders from seed cotton development, inputs and technology for proper cultivation, network and infrastructure, training farmers with the proper cultivation process to ensure productivity and quality, connecting with sustainable initiatives for ensuring social, environmental and commercial viability with traceability, development and training to standardize ginning factories and their practices to ensure quality, distribution and price mechanism of seed cotton for long term sustainability, connecting spinning mills to ensure a distribution and marketing network.

Eventually, to make the cotton cultivation profitable and sustainable for the farmers’ the aforementioned things need to be considered to develop “The Road Map”, identify tasks, distribute or allocate tasks and coordinate to implement the “Master Plan” successfully.

Conclusion

We need to conduct a detailed study to make the Road Map make it successful by analyzing the details with the necessary funding models to execute a model to implement a long term sustainable cotton policy and model for Bangladesh that would not only ensure profitability and sustainability of cotton farmers but also secure cotton for the backward and forward value chain. It will shorten our lead time and save foreign currency.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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