In the last few months, the rising price of cotton has worsened the difficulties of the manufacturers of local and export-oriented readymade garments, who are yet to recover from the pandemic-induced losses.
The price of cotton, 58-60 cents per pound before the pandemic last year, has increased to $1.2 per pound according to Bangladesh Textile Mills Association (BTMA) officials. The price of yarn has also increased due to the hike in cotton price.
Although the price of cotton and yarn has hiked, apparel makers have not been able to increase the price of readymade garments accordingly due to the ongoing pandemic.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) First Vice President Mohammad Hatem told Bangladesh Post that the price of yarn was $2.5 per pound during the August-September period last year, and now it has increased to $4.5.
“We are facing difficulties manufacturing the orders that were received before the price of cotton went up. Following the increased price of cotton, we tried to negotiate with the international buyers. Although the orders require an increased rate of 30 cents, they have agreed to increase it by 10 to 15 cents per order. We are trying to survive somehow, despite the huge losses,” he said.
The local apparel makers are feeling the pinch of the cotton price hike to a great extent.
“The cotton price hike has not really affected the spinning mills but the local fabric producers are bearing the brunt of the cotton price hike. They are not able to raise the prices as their businesses are already operating at a loss due to the pandemic,” said Bangladesh Textile Mills Association (BTMA) Vice President Mohammad Fazlul Haque.
He told the Bangladesh Post that the international buyers are determining the price of orders according to the increased rate of cotton and yarn in terms of new orders.
When asked about the old orders he said that the export-oriented garments might be facing difficulties in terms of old orders.
President of Bangladesh Internal Garment Manufacturers Association Md Alauddin Malik told Bangladesh Post that due to the cotton price hike, the production cost of apparels has also increased. However, the local manufacturers are not being able to increase the fabric price due to lower sales and lack of demand in the market.
The local traders said that they are at a loss and suffering extremely in the current situation. Production and demand, both have decreased. Most of the factories are operating at low capacity.
Local clothing retailer brands are also not exempt from the effects of the cotton price hike.
Khalid Mahmood Khan, founder of Kay Kraft and an executive committee member of the Fashion Entrepreneurs Association of Bangladesh (FEAB) told Bangladesh Post that the production cost has increased due to the increase in raw material price. The overall situation has put the manufacturers and customers in a hard and an uncertain situation as it affects both.
“There are some costs involved with the production that cannot be reduced. We have to think whether the customer will be able to buy the apparels if the price is increased; if they can’t, then we have to bear the losses. At a time when we are trying to survive the losses incurred by the pandemic, the cotton price hike has become another burden”, he added.