As the imported yarn price – mainly from China and India – are much cheaper, local spinners are always fighting in yarn market to keep their prices down. COURTESY
For the last 4 or 5-months Bangladeshi spinners are having an upward trend after a year of calamity in COVID-19. Following the trend, many investors are planning to set up a new spinning factory or increasing capacity. There is indeed a huge gap between total yarn requirements for Bangladesh’s readymade garment (RMG) industry and the capacity of local spinners’. Which has been fulfilling with imported yarn.
As the imported yarn price – mainly from China and India – are much cheaper, local spinners are always fighting in yarn market to keep their prices down. Spinners are really worried about cheap Indian yarn flooding the market, especially for 100% cotton yarn.
The situation is so grim that 100% cotton yarn business in Bangladesh are now totally depends on Indian yarn business strategy. In last two year, India sold their huge stock of cotton fiber in Bangladesh converted into yarn due to lack of demand in China market (trade war impact) and good cotton production. That is why yarn price was too cheap and we local spinners grieved to survive.
We know in spinning raw material contributes around 60~70% of the total cost, so if we can’t play with the spinning process of raw materials then it is tough to survive. We can consider the below points for 100% cotton yarn business:
Oppositely, if we think about different fiber yarn like Natural, Synthetic, Regenerated yarn, or blended yarn then beneficial for small factories like 50,000 Spindle. This unit will be customized with customer requirements. The positive side of this type of this kind of Spinning Mill is …
3 or 4 product lines can be used for running different processes at a time. Possible to minimize raw material cost during blending by considering fiber properties against required yarn quality.
Facilitate to change the product line with market demand to continue smooth business all over the year with market trend. Partnership business can be possible with few fixed customers by supporting them with all kinds of yarn.
These kinds of yarn not buying from abroad due to small requirements from buyers. Fibre dyed yarn and Recycle yarn requirements are increasing day by day. Here is the possibility to pick the market.
Current and projected percentage of different fiber trend in the fibers market
Also, we have to consider below threats in the yarn business, which is already we are facing and gradually new challenges are coming due to business mechanism by other’s country and end buyers:
Indian yarn is highly subsidized as their government provides incentives in the cotton purchase and production of yarn at the mill level and incentives for export yarn. As a result India now providing very competitive prices all over the year.
The news source stated that China is providing direct cash returns to exporters of about 15 to 20% on their export of fabric to Bangladesh. This is a direct threat to synthetic blended yarn.
Recently Indian Secretary said in the media that “we will have an agreement with Bangladesh to supply fabric and yarn to them and they will make the apparel and export it”. If it is done then we will lose one portion of the total yarn market. Buyer’s nomination habits for yarn source, especially from abroad. BCI and Organic yarn requirements are increasing but a shortage of good quality BCI and Organic fiber.
There is a huge market in the sweater industry. At this moment they are buying maximum quantity from abroad. We need to focus on the sweater market. The woven fabric industry is growing day by day. This is also a big market. Filament yarn, ACY (air covered yarn), sewing thread all are coming from India and China. Need to check the possibility to pick these markets.
Re-cycle the yarn business is a new opportunity. We have good raw material (garments wastage, spinning wastage) source to take full advantage of this yarn business.
Finally, we need mutual support from BGMEA, BKMEA and BTMEA for business projection, scope and future demand to develop the yarn business in a statistical way for sustainable business. Also need a regular study on our capacity, market demand, obstacles, and future opportunities. If required need to develop a specialist team for that.
0 Comments