India still remains a 'preferred' source of cotton for Bangladesh
Bangladesh spinners and traders still prefer India as a major destination for cotton and yarn imports due to factors such as proximity, low transportation cost and easy availability of required raw materials,
industry insiders have pointed out.Due to these advantages, they usually import a large quantity of cotton from neighbouring India,
Data compiled by the Bangladesh Garment Manufacturers and Exporters
Association (BGMEA) based on central bank data showed that
Bangladesh imported 19.40 per cent of its required raw cotton from India in fiscal year 2023-24, valued at
US$684 million.
According to available data, Bangladesh imported cotton - carded and
combed - worth US$3.52 billion in fiscal year 2023-24.
Brazil remained the country's second largest destination for cotton imports with a 16.11 percent share in FY2024, followed by Benin at 12.03 percent and the US at 10.12 percent.
Bangladesh imported cotton worth $568 million from Brazil, $424 million from Benin and $357 million from the US, respectively, in FY2024.
About 8.0 percent of the imported cotton in the said fiscal year came from Burkina Faso, about 7.80 percent from Australia, 7.01 percent from Mali and 6.94 percent from Cameroon.
According to the data, Bangladesh also imported cotton worth $4.0 million and US$2.0 million from China and Pakistan, respectively.
However, textile mill owners and garment exporters have anticipated that the volume of cotton imports from the US will increase significantly as the Trump administration has recently announced that Bangladeshi-made RMGs will get conditional duty exemption on using at least 20 per cent of US raw materials such as cotton. BGMEA president Mahmud Hasan Khan said Bangladesh imports most of its cotton requirement from India.
The latest conditional duty exemption by the US on using at least 20 per cent US cotton to produce exportable garments for the country may reduce cotton imports from other countries as local exporters are expected to increase their imports from the US to enjoy this benefit. He said that initially, imports from Brazil will come down, followed by Australia, India and then African countries. Ha-Mim Group managing director A.K. Azad, while talking to FE, said that they import cotton mostly from India, Brazil and Africa. He said that Bangladesh's cotton imports from the US will now increase since the announcement of duty benefits.
However, he said that though US cotton is comparatively expensive,
its quality is good as it has a low wastage rate.
He said his company needs organic cotton, and Bangladesh imports it mostly from India as other countries are unable to supply it,
However, Mr Chowdhury said that though the quality of US cotton is better than other countries in terms of colour, whiteness and low wastage rate, they still cannot use US cotton in some woven products as it has 'lack of fibre'. Echoing the same, Abdullah Hil Naqib, deputy managing director of Team Group, said they import cotton from China and India to produce yarn, fabric and exportable ready-made garment items. However, he said clarification is required about the extent of duty exemption applicable in export of garment products to the US market. He also indicated that the use of US cotton will increase in the coming days. Apart from cotton, Bangladeshi garment manufacturers prefer to use Indian yarn due to high prices of locally produced yarn and reduction in incentives.
Local textile mill owners argued that poor gas supply hampers local yarn production, increasing manufacturing costs. They said India exports yarn to Bangladesh at dumping rates. Speaking to FE, Fazlul Haque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said yarn imports from India have mostly increased due to an oversupply of locally produced goods. He said the average price difference between local and imported combed yarn has widened to 40 cents per kilogram.
He further said garment manufacturers, who have greater capacities including large storage facilities and long lead times, prefer imported yarn. Moreover, the rate of incentives, which earlier encouraged RMG exporters to buy yarn from the local market, has been reduced by the government.
According to USITC data, Bangladesh imported yarn worth US$2.9 billion in 2023.
In 2023, about 56 percent of total cotton or US$1.6 billion worth was imported for yarn production and Indian cotton imports accounted for a third of total imports.
read more:- Exporters' demands: Term loan moratorium and cotton import duty waiver
Regards
Team Sis
Any query plz call 9111677775
https://wa.me/919111677775
