No hike in yarn prices for now
The meeting was attended by top leaders of the concerned organizations
Entrepreneurs of ready-made garment industry and the textile sector have decided that the price of yarn will not be increased now.
After a meeting, they have agreed to find a way out of the complications caused by continuously rising yarn prices.
The decision was taken at a meeting of representatives of Garment Industry Owners, Terry Towel Exporters, and the Textile Mill Owners Association at a hotel in the capital's Banani on Tuesday night.
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The meeting was attended by top leaders of the organisations concerned.
Following talks, the Bangladesh Textile Mills Association (BTMA) on Wednesday sent a letter to its member mill owners urging them not to raise yarn prices for the time being.
The letter said the price of yarn issued by August 10 (proforma invoice or offer of price of yarn sent to a buyer by the seller) should not be increased even one cent until further notice. The PI also mentions a period of 15 days instead of seven days for related activities, including opening a letter of credit (LC).
It was decided in the meeting that representatives of all sides will work together to this end.
Representatives of the parties concerned will meet again next week. Until a further meeting, representatives of textile mill owners agreed not to increase the price of yarn.
If the price of cotton does not increase, the price of yarn will not increase. In this, they will also decide what the price of yarn should be fixed at taking into consideration the price of cotton.
After the meeting, Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told The Business Standard (TBS) that the meeting was fruitful. There will be another meeting in the next two days.
"Hopefully, a solution will come of it," he said.
M Shahadat Hossain Shohel, chairman of Bangladesh Terry Towel & Linen Manufacturers and Exporters Association (BTTLMEA), present at the meeting, told TBS that the price of yarn would not go up for the time being.
"The price of yarn will be decided by the representatives of all parties concerned. The price will be determined on that basis," he added.
He said, a probable price can be calculated by taking the price of cotton in the United States as the basis, adding import costs, banking and insurance costs, the cost of production, and a reasonable profit.
"Based on this, one can take more or less two or four cents. But unusual profits cannot be made," said M Shahadat Hossain Shohel.
Mohammad Ali Khokon, president of Bangladesh Textile Mills Association (BTMA), who attended the meeting virtually, said to TBS, the meeting decided that the price of yarn would not rise further at present.
"But our current rate is not much higher than India's. This issue has come up in the meeting," he added.
Envoy Group, one of the largest garment manufacturers in the country, imports cotton and produces yarn and cloth.
"Everyone should accept the decision. If one does not survive, the other will not survive too. If you are not reasonable with profit, it will not be good for anyone," Kutubuddin Ahmed, chairman of the company, told TBS.
"Now the textile mill owners have started [to take appropriate price action]. We will be able to tell the garment owners if we face losses later. Someone has to start."
The price of yarn has increased, as the price of cotton, the main raw material for readymade garments, the main export sector of the country, has also gone up over the last eight months globally.
It should be mentioned that the owners of garment factories complained that local spinning mill owners had unfairly increased the price of yarn due to high demand.
