Recent data from the Dhaka Stock Exchange (DSE) showed that of the 26 listed textile and spinning companies showing a mix result. Some listed spinners at DSE recorded higher profits in the July-March 2021 period than that of a year ago thanks to a price hike of yarn. Among six listed spinners, four observed higher profits and two were able to make a profit on incurring losses previously. While 16 underwent a drop in earnings. Some 10 manufactures reported a fall in profits.
Paramount Textile’s profit fell over 5 percent to Tk 52 crore compared to the same period of the previous year. However, become the top profit maker in the period.
While Malek Spinning recorded the highest profit growth among all the 26 listed textile companies. Earning Tk 39 crore in July-March 2021 period.
Experts opined that while textile and RMG were struggling, spinning mills benefited from the price hike of yarn aiding those logging higher profits.
Syed Saiful Haque, Company Secretary of Malek Spinning Mills said to a local media, “Our profits rose as in the period our sales were higher along with the prevalence of a higher price of yarn.”
“Still the year’s prices were good so we are generating better business,” he added.
The spinning mills attributed the hike in cotton prices to rising demand for the item globally and its supply crunch, and upward costs of other related logistics following the emergence of the pandemic.
Due to the pandemic shut down in China, the price of cotton rose. Then India amplified the price alongside Bangladesh’s local spinners.
Simultaneously, cotton prices increased in the world market that boosted yarn prices. It ultimately had an impact on the local yarn market.
During the June-December period last year, cotton prices ranged between $0.60 to $0.85 per kg on average. Which later on ranged between $0.95 and $1.7 in March, according to data of Bangladesh Textiles Mills Association (BTMA).
Bangladesh is largely dependent on China and India for cotton and other raw materials.
So companies that had stocks of cotton booked a massive amount of profits during the period. And the local spinning mills generated higher profits.