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Higher yarn consumption, a prospect for local spinners

Bangladesh has witnessed an identical export income from garment export. Last year, almost 85% of the contribution from the RMG sector ensured the continuous improvement of domestic garment manufacturing. Increasing garment export has also increased yarn consumption as it has handled high demand.

BD Higher yarn consumption
Figure: The knitwear sector consumes the highest yarn in Bangladesh as the local 450 spinners can supply more than 80% of the raw materials needed by the manufacturers and exporters.

Export Promotion Bureau (EPB) says, in the 2018-19 fiscal year, the export income of Bangladesh was $34.13 billion, which was $21.51 billion in fiscal 2012-13. Between fiscal 2012-13 and 2018-19, Bangladesh’s garment export increased nearly 10%.

Yarn consumption has already doubled over the last few years. Secretary to the Bangladesh Textile Mills Association (BTMA) Monsoor Ahmed said, last year local garments consumed 22 lakhs tons of yarn. The amount was 10 lakhs to 11 lakhs tons in fiscal 2012-13.

The knitwear sector consumes the highest yarn in Bangladesh as the local 450 spinners can supply more than 80% of the raw materials needed by the manufacturers and exporters. It consumes more than 16 lakh tons of yarn in a year, according to the spinners.

Though there are some issues like Brexit, US-China trade war and earlier fire-accidents, new export destinations such as Japan, India and China have been growing at a faster rate in comparison to traditional markets like the EU, the US and Canada for Bangladesh’s garment export.

Monsoor Ahmed said, “Previously, the import of yarn was not so high”. He also pointed out, the consumption trend of yarn has changed, especially over the last two years, as imports are increasing for the availability of cheaper yarn in India and China.

Bangladesh has been going backward for some reasons like High bank interest, gas price hike, congestion at port, wage hike, recent devaluation, etc.

Despite of higher demand, yarn consumption has declined from local spinners. Around 50-50 mix of imported yarn and local yarn consumption will not strengthen the sustainability of the Bangladesh RMG sector. As Bangladesh RMG sector cannot survive without strong backward linkage, increasing demand should be addressed with the local spinners. For this, Bangladesh spinning sector should focus on higher capacity utilization and diversification of yarn.

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