Govt halts yarn imports via land ports, RMG exporters call decision 'suicidal'

The government has halted the import of yarns through land ports to prevent misuse of the facility, as these ports lack the capacity to properly identify different categories of yarn.

Apparel exporters, however, strongly criticised the interim government's decision, calling it a "suicidal" move for the industry.

The government's move follows requests from textile mill owners who suggested yarn should be imported only via seaports, as land ports lack the necessary infrastructure to vet raw materials.

A notice issued by the commerce ministry on Thursday (27 March) says, based on the information provided by the Bangladesh Textile Mills Association (BTMA), stakeholder opinions and necessary investigations, it has been established that all types of yarn imported through the land ports are significantly undervalued compared to the prices declared at the Chittagong Customs House.

Domestic yarn manufacturing companies are unable to compete with this undervalued price, adds the notice.

The average price of yarn produced in China, Turkey, Uzbekistan and Bangladesh is almost the same, but the price of yarn imported using land ports is much lower. This is causing irreparable damage to the domestic textile industry, it said.

"In this situation, it is requested to take necessary measures by issuing a notification to stop the import of yarn through all land ports or by issuing a corresponding amendment to the existing Statutory Regulatory Order (SRO)," the notice added.

'A suicidal decision'

Speaking to TBS, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) President Mohammad Hatem expressed shock over the commerce ministry's notification, which came just two days after a consultation meeting between government officials and apparel exporters.

"This decision will be suicidal for apparel exporters," Hatem said, questioning whether the National Board of Revenue (NBR), through this circular, had effectively admitted to the Bangladesh Textile Mills Association's (BTMA) allegations — specifically that businesses were importing multiple truckloads of goods under a single truck LC and bringing in higher-count yarn under LCs for lower-count yarn.

"Does this mean that the customs officials are accepting responsibility for their failure? We don't really consider customs officials to be so inefficient or corrupt," he added.

Meanwhile, former BGMEA Senior Vice-President Abdullah Hil Rakib told TBS that the government's initiative would force apparel exporters to buy yarn from the local market, increasing costs and harming their competitiveness.

"We have to acknowledge that today's small enterprises will one day grow into large companies—current industry leaders are proof of this," Rakib said, warning that forcing small and medium enterprises to depend solely on the domestic market could threaten their survival.

"It is not ethical to force apparel exporters into an economic model that limits their choices," he added.

What BTMA said to finance adviser in January

In a letter to Finance Adviser Salehuddin Ahmed in January, BTMA President Showkat Aziz Russell said that a previous policy revision had allowed yarn imports through land ports, but these ports lack the necessary infrastructure to scrutinise raw materials.

Additionally, the policy permitted partial shipments, which, according to industry observations, have led to widespread misuse, adversely affecting local mills.

In its letter, BTMA warned that allowing continued yarn imports through land ports would cause irreparable damage to the country's textile sector, increasing reliance on imported yarn and leading to higher import costs and unemployment.

Instead, they proposed that yarn, a key raw material for the ready-made garment (RMG) industry, should be imported only through seaports.