BGMEA urges for cotton council formation to control domestic prices

The Bangladesh Garment Manufacturers and Exporters Association has handed a proposal to the ministry of commerce (MoC) to constitute the Cotton Security Council, which is supposed to control prices of domestic cotton yarn. The apex body of apparel makers has also demanded inclusion of the provision of council into the new export policy of 2015-18.

But the Bangladesh Textile Mills Association has opposed the idea and sent a letter to the ministry, calling the proposal ‘unreasonable’, ‘unrealistic’ and ‘inconsistent.’

The country’s spinning mills are providing some 80 percent and 40 percent cotton yarns to the domestic knit and woven garments units at competitive prices, acting as backward linkage.

The domestic spinning mills are often competing with the imported cotton yarn.

Prices of the country’s yarn depend mainly on three factors: prices of imported cotton yarn, prices of Indian cotton yarn and domestic demand of apparel makers.

The prices of the yarns depend on the size and productivity of the domestic mills as well.

According to textiles lobbyists, they have no hand; rather the market determines the yarn price as Bangladesh follows free market economy. The prices of Indian cotton yarn and orders of local garment exporters are low, forcing domestic spinning mills to keep prices in consistent with Indian yarns.

Expansion and competitive situation of the country’s spinning mills will be hampered if the proposal to form the council is accepted. So, there is no need to formulate the council in the country.

There is a need for a balanced council on cotton yarn so that interests of both sides are protected, said the former president of BGMEA Abdus Salam Murshedy. The council will take decision without bias when the situation demands.

While, according to Jahangir Alamin, a former president of BTMA, domestic spinning millers depend entirely on imported cotton. Besides, prices of cotton yarns are fixed according to the New York futures market. No organization can control the prices of cotton yarn in the international context. It will be against the free market economy if any move is taken to control the prices of domestic cotton yarn.

Presently, there are 407 spinning under the BTMA in the country.

The Garment makers and textiles producers are locked in a row over the formation of a panel intended to regulate local cotton yarn prices.