Bangladesh’s spinning industries and sub weaving sector have been facing a tough situation as most of the mills are reeling under huge stock piles of unsold yarn and fabrics. Yarn worth Tk 1,000 crore has been piled up in the warehouse, according to Bangladesh Textile Mills Association (BTMA).
Manufacturers are getting panicked as the huge amount of yarn and fabrics lying unsold. In the last seven to eight months, the demand for locally manufactured yarn and fabrics pushed into more stuck situation to sell the yarns.
On the other hand, fabrics illegally imported by misusing the bonded ware house facilities by an errant group of apparel makers are talking toll on the sector.
Currently, the apparel work order is slower than the same period of last year, which dragged down demands of yarn and fabrics. It was assumed that work orders flow will increase due to the ongoing US-China trade war.
In August, the apparel sector, which accounts for 84% of national exports, witnessed an 11.46% decline to $2.41 billion.
Apparel makers also say that the demands of yarn are slower as the work order inflows is less than the previous year.
According to National Board of Revenue (NBR), during January-June period of the year, Bangladesh imported 602,432 tons of yarn, while it exported (deemed export) 506,342 tons, meaning imports are higher than exports. India, China and other countries offer better prices of yarn and fabrics as their governments have devalued dollar while they have their own cotton against Bangladesh’s zero production.
To overcome this situation, the sector people asked for policy support, as the misuse of bonded warehouse facility and to illegal imports must be stopped of Indian and Pakistani clothing products.
Now the sector is able to supply 85% of yarn and fabric for knitwear sector and 40% of woven fabric.
Government should cut 5% advance income tax (AIT) on fibre. It is a burden for the sector people as they cannot even make 1% profits, sector people said.