INSIGHTS
- To reduce stockpiling of unsold yarn and save US dollars, the Bangladesh Textile Mills Association has urged woven and knit garment makers to open back-to-back letters of credit and buy yarn from the domestic market.
- The allocation from the Export Development Fund should also be raised from $20 million to $30 million to overcome the crisis, it demanded.
The Bangladesh Textile Mills Association (BTMA) has urged woven and knit garment manufacturers to open back-to-back letters of credit (LCs) and buy yarn from the domestic market to reduce stockpiling of unsold yarn and save US dollars.
The government should raise the allocation from the Export Development Fund (EDF) from $20 million to $30 million to help manufacturers overcome the crisis resulting from unsold yarn, it demanded.
Addressing a press conference yesterday in Dhaka, BTMA president Mohammad Ali Khokon said the association had sent a letter to the National Board of Revenue (NBR) in April demanding necessary steps against selling illegally imported yarn, clothes and dress material in the market.
Bangladesh has a viable backward linkage industry in the primary textile sector and the mills are supplying the bulk of export-quality yarn and fabrics to the export-oriented garment sector, the letter mentioned.
“We have come to know that there has been a large trade of the illegally imported yarn and cloth in the major textile hubs, especially Narayanganj, Araihajar, Gausia, Madhabadi, Baburhat, Narsingdi, Tangail, Sirajganj, Belkuchi and Pabna,” the letter said.
The resulting liquidity crunch in the mills is quite evident due to a massive rise in stock of yarn and cloth manufactured in the domestic mills, Bangladesh media outlets reported.
The government is also losing revenue because of this, while mills face cash crunch, the letter stated.
Global recession in the context of the Ukraine-Russia war, problems in importing raw materials due to the dollar crisis and reduced purchasing power of buyers, including not getting fair prices for finished yarns and fabrics, have aggravated the crisis.
Source: https://www.fibre2fashion.com/