The country’s spinners have been hit hard by the decrease in prices of yarns by 12-15 per cent in the last few months due to leakage of bonded warehouse and smuggling of low-cost yarns from neighbouring country, industry people have said.
The prices of yarns fell to $2.40-$2.90 dollar a kilogram from $3-3.10 dollar which was lower than the production cost.
According to Bangladesh Textile Mills Association data, the sector sits on stockpile of yarns worth Tk 12,000 crore as the demand for the item goes down in the local market for availability of the item imported under bonded warehouse facility.
Spinners have also blamed smuggling and import of yarns through miss declaration evading taxes for the price fall in local market.
‘The country’s spinners have been facing a very tough time as the misuse of bonded warehouse has become a common practice and imported yarns and fabrics are flooding market,’ Shahid Alam, vice-chairman of Jalal Ahmed Spinning Mills Ltd, told New Age on Tuesday.
Some of the business people were importing yarns and fabrics under bonded warehouse facility and letter on selling the duty-free items in open market at low prices, he said.
At the same time, some of the businesspeople were importing 80 count of yarn from India through miss declaration evading taxes, Shahid said.
‘The price of 80 count of yarn is Tk 520 a kg and the price of 30 count of yarn at Tk 235a kg, and some of the businesses are often importing 80 and 60 count of yarns with the declaration of 30 count of yarn,’ he said.
Shahid said that the sales of 80 and 60 counts of yarn produced in local mills remained almost stalled due the smuggling and import of the items through miss declaration.
If the bonded warehouse had not misused, country’s weaving mills would have been engaged in the production of fabrics to meet local demand using the local yarns, he said.
According to the BTMA statistics, the production costs of yarns stand at $3-3.10 dollar a kilogram while the spinners are now selling the items at $2.40-$2.90 dollar per kg.
Mohammad Ali Khokon, president of BTMA, said that misuse of bonded warehouse, import through false declaration and smuggling through border hat were the prime causes of low demand for local yarns.
‘If you go to market, you will see foreign fabrics and dresses flooding the market. But if you go to the customs for import data, you will find the commercial import of fabrics and yarns very negligible,’ he said.
He urged the government to stop misuse of bond and smuggling of yarns to protect the country’s promising spinning sector.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Miscellany