Even though the price of domestic yarn is up to $0.20 higher than imported yarn, readymade garment (RMG) industry owners are ready to buy it in the interest of the country's industry.
However, there is one condition - the bonded warehouse facility cannot be withdrawn for yarn imports without ensuring this price difference.
Leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) made this demand at a joint press conference organized at the Pan Pacific Sonargaon Hotel in the capital on Monday (January 19).
It was informed at the press conference that currently domestic mills are selling yarn at a price of $0.35 to $0.60 more per kg than imported yarn.
However, owners do not object to paying a maximum price of $0.20 more than imported yarn to sustain the domestic industry. They expressed concern over the initiative to withdraw the bonded facility before this gap was confirmed.
It is learnt that currently, a large part of the export-oriented garment factories is using yarn imported from India. While Bangladeshi spinning mills sell a kilogram of 30-card yarn for about $3, Indian manufacturers are supplying the same quality yarn for $2.60. Due to the comparatively low price, entrepreneurs are leaning towards importing yarn from India, China and Vietnam.
BKMEA president Mohammad Hatem said: “If a duty is imposed on yarn imports, it will have a direct negative impact on exports. We are in favor of protecting domestic spinning mills, but if the bonded facility is withdrawn at this time, the ready-made garment industry will be in a major crisis. Exports have been declining for the last six months. This new decision will further push exports.”
BGMEA acting president Selim Rahman said in a written statement: “When the industry is in turmoil due to the three-pronged pressure of global market slowdown, geopolitical instability and domestic energy crisis, a suicidal decision like imposing duty on yarn imports has been taken.”
He alleged that the Tariff Commission has taken a unilateral decision on this sensitive issue despite garment exporters being the main buyers of domestic spinning mills.
He commented that the opinions of the garment industry have been ignored during the discussions.
On behalf of BGMEA, he urged the government to immediately withdraw the decision to impose duty on yarn imports. To protect the textile sector, direct cash assistance or special incentives can be given instead of imposing duty on imports.
He also recommended ensuring uninterrupted supply of gas and electricity, rationalizing fuel prices, corporate tax rebates for export-oriented spinning mills, and reducing production costs by ensuring easy availability of low-interest loans.
BKMEA executive president Fazle Shamim Ehsan, BGMEA senior vice president Enamul Haque Khan, vice president Rezwan Selim, director Faisal Samad, and other leaders of the organizations were also present at the press conference.
