Due to rising production costs, domestic textile millers—especially spinners—are facing “uneven” competition from foreign competitors and are losing contracts for yarn, equal from local exporters of ready-made garments.
RMG exporters now favor procuring raw materials from outside, which is preventing the domestic spinning industry from continuing to grow.
According to data from the central bank, imports of other raw materials, such as raw cotton, textile and article, and staple fiber, declined in the first nine months of the current fiscal year (FY), while imports of yarn climbed by double digits.
Based on data from Bangladesh Bank, yarn imports rose by over 10% during the July–March period of FY 2023–24 compared to the same period the previous fiscal year.
During the time, Bangladesh imported yarn valued US $2.32 billion, compared to US $2.10 billion during the July–March period of FY 2022–2023.
Throughout the first nine months, there was a 9.1% decrease in the total amount of RMG input imports. Raw cotton accounted for 24.9% of this fall, followed by textiles and articles (8.2%), staple fiber (6.1%), dying and tanning products (3.1%), and other items.
In comparison to US$13.39 billion over the same time in the previous fiscal year, the nation spent US$12.17 billion on those imports during the review period.
Textile mill owners said that high electricity bills and insufficient gas supplies were to blame for their excessive production costs, which in turn raised the cost of yarn produced nearby.
In response, exporters said that yarn made locally costs more than yarn made abroad. The previous president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Faruque Hassan, expressed worry over the rise in yarn imports despite a decline in imports of other raw materials.
Local yarn costs are more than those of imported yarn, according to BGMEA President SM Mannan Kochi. He clarified that exporters are still purchasing yarn from outside since they are not price competitive, even though they receive financial incentives for doing so.
According to industry analysts, local textile mills are able to meet approximately 80% of the demand for the knitwear subsector and 35–40% of the demand for woven materials.
