Importers do not see any sign that the volatile international cotton market would calm down anytime soon as cotton consumption surges.
In the face of pricier yarn and fabrics – main raw materials for the country's readymade garments – the importers and textile mill owners at a press conference Monday suggested apparel-makers to negotiate their clothing rates with the foreign buyers.
At a press conference in Dhaka by Bangladesh Cotton Association (BCA), there had been an argument between the textile mill owners and terry towel exporters over lifting the import duty on yarn to rein in the local yarn market.
Cotton Association of Bangladesh President Mohammad Ayub gave a presentation on cotton price hikes in the last two months and hinted at spiked cotton consumption in future.
"We are skeptical whether cotton prices will come down in the future," he said.
He said cotton turns pricier not only for Bangladesh, but also the countries that produce cotton are having problems in getting the apparel raw material. Apart from the supply crunch, mismanagement of logistics such as costlier shipping, container scarcity and congestion at the port are also responsible for the price spike.
"The market is too volatile. It is very uncertain what happens next," Mohammad Ayub, told The Business Standard, after the press conference.
He said cotton prices in the latest hike spiked by 20-25 cent per pound.
"Cotton that cost 90-95 cent per pound two months ago, is now at $1.17 upon the port arrival," he stated.
A fragile confidence among the textile mill owners, apparel manufacturers and terry towel exporters came to the spotlight at the press conference.
Shahadat Hossain Sohel, chairman of Bangladesh Terry Towel Manufacturers and Exporters Association, called for the lifting of the existing 37% import duty on yarn to rein in the prices.
Opposing this, Monsoor Ahmed, a representative of Bangladesh Textile Mills Association, said if the duty is lifted, local industries will face problems.
Fazlul Hoque, vice-president of Bangladesh Textile Mills Association, told The Business Standard after the press briefing that if the apparel exporters fail to negotiate with the buyers to increase the prices, they will be in trouble as cotton prices are rising in the international market.
Among others, Md Shahidullah Azim, vice president of Bangladesh Garment Manufacturer and Exporters Association (BGMEA) and Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturer and Exporters Association (BKMEA) were also present at the press briefing.