Around 8 billion dollars primary textile industry will be in trouble if yarn prices slide on supply glut.
In the mid of the year between June and July, the widely consumed 30 carded yarns sold between US$3.40 and US$3.50 per kg. However, from November onwards the prices of the same yarn dropped to $3.05 a kg.
Industry insiders said that the fall in yarn prices by at least 12 percent in the last two months has made Bangladesh’s 430 local millers tense. If the trend continues, the stock of yarn, which is the main raw material for finished apparel items, may pile up, putting the $8 billion primary textile industry under threat.
Bangladesh’s yarn suppliers think that, easy availability of cheap Indian yarn and lower prices of raw cotton worldwide due to the US-China tariff war are responsible for the sliding yarn prices.
The total demand for yarn is more than 21 lakh tons per year. Of the demand of 70 percent is met by local millers and the rest is imported, mainly from India, China, Vietnam, and Pakistan.
Bangladesh’s 430 spinners can supply nearly 90 percent of the demand for yarn from the knitwear sector and 35 percent from the woven sector. As a result, Bangladeshi woven garment manufacturers import fabrics worth more than $6 billion from countries like China, India, Vietnam, and Pakistan.
Monsoor Ahmed, Secretary of Bangladesh Textile Mills Association (BTMA), said, “The oversupply of Indian yarn has been worsening the situation as there is a possibility of yarn’s inventory piling up. Therefore, the prices of yarn are falling every day because of oversupply.”