Local garment manufacturers have called on the government to ease the conditions for importing yarn, cotton and textiles, as work orders were received from international clothing retailers and brands.
“We have a lot of work orders … We need ready-made raw materials such as yarn, cotton and textiles,” said Farouk Hassan, president of the Bangladeshi Manufacturers and Exporters Association of Bangladesh (BGMEA).
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The number of work orders is so large that local raw material suppliers are also having difficulty securing timely supplies, Hassan said.
Hassan sent a letter to Commerce Minister Munsi on Saturday urging a relaxation of yarn import rules from India, removing various non-tariff barriers and improving infrastructure in land port areas.
He called on the government to allow the import of yarn, cotton fabrics and other raw materials, in particular through the land ports of Bhumra and Sunamasjid under welded warehouse facilities.
At present, importers can import yarn, cotton and textiles from India within the linked warehouse only through the port of Benapole, as it had storage and storage facilities.
The BGMEA has also asked the government to allow some shipping facilities through land ports, including the land port of Benapole.
The partial import of raw materials is now allowed only through the country’s first seaport in Chattogram.
Partial shipment refers to the import and unloading of part of a shipment ordered by letter of credit (LC).
Entrepreneurs choose part-time shipment mainly for timely use of raw materials and to reduce the cost of storage and storage of imported goods.
For example, imagine an importer opening an LC to import 100 tons of yarn but currently using 50 tons.
In this case, he chooses to carry more than 50 tons at the moment and import the remaining 50 tons later, when it suits him.
However, in the case of raw material imports not made through the Chattogram port, importers do not have the margin for some shipments.
Importers must therefore import the entire shipment at once if they are not unloaded at the Chattogram port.
“Partial shipment is very important for us as we also need to reduce storage and storage costs,” Hassan said.
“The government should also build more warehousing facilities in the land port areas so that the goods can be stored properly,” he told The Daily Star by telephone.
The BGMEA has also sought to improve infrastructure in land port areas in order to avoid congestion in the event of the import of bulk raw materials from India.
Local garment manufacturers are trying to import yarns and fabrics from India in large quantities as demand has increased with increasing job orders while yarn prices have risen in local markets.
Local manufacturers and exporters of garments and spinners had recently disagreed over yarn supply instabilities and unusual fluctuations in yarn prices in local markets.
Last week, in separate press conferences, leaders of BGMEA, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), terry towel Association and Bangladesh Textile Mills Association (BTMA) sat together in a meeting where they decided not to raise yarn prices. in local markets.
Monsoor Ahmed, CEO of BTMA, chose not to allow partial shipment through land ports on the grounds that it would create fields of irregularities.
The government has stopped some missions many years ago to stop the irregularities, Ahmed told the Daily Star by telephone.
The BGMEA in its letter could not say whether they would get yarn at lower prices from any country, Ahmed said.
Yarn prices in local markets increased mainly due to the relative increases in freight and cotton charges in international markets. The same reasons apply to garment manufacturers and exporters, Ahmed said.
“It is not possible to import yarn without bonds. The local industry will face challenges if all the ports are opened and the government loses a lot of revenue. Therefore, it is not possible to import yarn without bonds,” said BTMA President Mohammad Ali Khokon.
Garment manufacturers want to import yarn without bonds, which is very dangerous for the local industry, he added.
Last fiscal year, Bangladesh imported 8.2 million bales of cotton and 326,539 tonnes of yarn, according to BTMA data.
The spinners say they can supply 3,500 million kilos of yarn a year.
The BGMEA said in a letter that production costs had risen by 30.10% in the past eight years, although clothing prices had fallen by 3.7% last year due to the effects of Covid-19.
Fare charge increased from 100% to 300% during the pandemic. For the past year and a half, local garment exporters have taken care of work orders accepting losses.
But now they expect to make a profit as international retailers and brands place a lot of work orders. However, high yarn prices are becoming a major concern for them, BGMEA said in the letter.