Spinning and weaving mills basically constitutes the primary textile sector of Bangladesh which is represented by Bangladesh Textile Mills Association. The sector is heavily dependent on the cotton import as their raw materials and primary fuel gas for their captive power generation. As the sector is growing, cotton import volume is increasing day by day. Within few years Bangladesh could become number one cotton importer of the world. Now the country is trailing marginally behind China. Bangladesh is importing 50 percent of its cotton from India and so the supply chain has become heavily unilateral. Besides Indian spinning sector is they key rival of the local spinning mills.
On the other hand primary textile industries requires highest amount of power in the textile value chain as they host high power consuming heavy machinery. Most of these factories run on their own captive power generation facilities which run on gas. Current developments related to gas are a big concern for the industry. Amid severe crisis of gas supply government is not providing new gas connections and also she is planning to increase gas price. Cotton and gas two most important ingredients of the sector were at the center of discussion in ‘World Cotton Outlook Summit 2016’ held recently in Dhaka.
Within ten year from 2005 to 2016, Bangladesh’s cotton import climbed to 6.1 million bales from 3 million bales. The summit on cotton forecasted that the country will require 1 crore bales (10 million) cotton per year in recent future to meet up the total capacity of spinning mills. Through a joint initiative, Bangladesh Textile Mills Association (BTMA) and IBC Asia Pte Ltd organized the event called ‘World Cotton Outlook, 2016’ which was held on 27-28 April, 2016, at the Ballroom of The Westin, Dhaka.
The summit was inaugurated in the presence of chief guest Mirza Azam, MP, State minister, Ministry of Textile & Jute, Special guest Hedayetullah Al Mamun NDC, Senior Secretary, Ministry of Commerce and Tapan Chowdhury, President of the Board of Directors, Bangladesh Textile Mills Association (BTMA).
Tapan Chowdhury, President of BTMA said in his speech, Cotton is the primary product of RMG but basically we are not a cotton producing country. 50 percent of our cotton we import from India. So the summit will play a vital role for India and Bangladesh to understand the current business stream. 81 percent of our total export had come from Textile & Clothing sector in the year 2014-2015. It was possible because of low lead time of our RMG industries which was helped by the supply of right yarn & fabrics by primary textile industries. Mr. Chowdhury added. He stressed the gas price issue and told that government is planning to increase gas price by around 130 percent again. He warned that if the gas price is increased again Bangladeshi spinners will lost its competitiveness over neighboring countries and many factories could be shut downed. Such initiative will badly affect the supply chain of apparel export. He added that such decision will make things difficult to achieve 50 billion dollar export target from textile & clothing sector within 2021.
The government proposed to increase gas price by about 130 percent to Tk 19.22 per cubic metre for captive power plants from Tk 8.36 at present. The government had last increased the gas price in September last year to Tk 8.36 per cubic metre from Tk 4.36. Answering the question of industry representative about gas price, Mr. Mirza Azam, MP, Honorable state minister, Ministry of Textile & Jute said that his government is working to resolve power crisis and also to stabilize its prices. In a different meeting another powerful minister of the current government has mentioned that factory owners will have to wait till the end of 2017 for new connections. The minister asked the businessmen to think alternatives for their investments.
About 150 industry personnel participated different sessions of the summit.
