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The dispute between spinners and garment manufacturers was resolved after the two sides fixed the price of the widely consumed 30-carded yarn at a maximum of $4.20 per kilogram.
The two sides reached the decision Saturday night, ending the disagreement that would ensure a smooth supply of the key raw material to garment and terry towel exporters.
“We arrived at a consensus on the yarn price in consultation with the spinners on Saturday night,” said Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA), also confirmed the development.
“We agreed to set the ceiling of yarn as garment and terry towel manufacturers were demanding lowering of the prices of yarn,” he said.
As per the decision, spinners will get $4.20 per kg for the 30-carded yarn if cotton price ranges between 85 US cents and $1 per pound in the international markets.
Cotton was traded at 93 cents per pound when the price was set.
“If the cotton price goes past $1 per pound, we will sit again to fix the new price limit,” Hassan told The Daily Star.
“Similarly, if the cotton price drops below 85 cents per pound, spinners will also lower the price of yarn accordingly.”
The price of the 30-carded yarn has been fixed as a benchmark as it accounts for more than 85 per cent of the total consumption of the raw material in Bangladesh.
The spinners also assured the garment manufacturers and terry towel exporters of ensuring a stable supply as Bangladesh is receiving an increased volume of work orders from international retailers and brands.
“We will be able to supply the yarn at the fixed prices,” Khokon said.
The BGMEA and the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA) were in dispute with the BTMA as the prices of yarn were spiralling in the local markets.
This prompted the leaders of the BGMEA and BTTLMEA to write to the government in the first week of August, seeking to ease off conditions for yarn import through land ports to rein in the price hike.
The trade bodies had also called for separate press conferences. But they cancelled the briefings and sat for talks to reach an amicable solution to the situation.
The spinners have not increased the prices since August 10 after the BTMA requested them to refrain from raising it as garment manufacturers were feeling the pinch of the higher cost of the raw material.
“We are receiving more orders as western economies have reopened. We need a lot of yarn and fabrics at affordable prices to be competitive in the international markets,” Hassan said.
He said manufacturers wanted yarn from the domestic markets as local procurement gave some advantages.
“However, unusual price hikes may force us to source yarn from alternative markets.”
Bangladesh imports 30 per cent of yarn from countries such as India, Pakistan, Indonesia, and Turkey as local spinners do not produce specialised varieties of the raw material.
(TDS)
