Home textile and terry towel makers in the country feared that they would incur huge export losses in the current fiscal as their factories were running at less than 50 per cent capacity due to shortage of yarn.
They claimed that buyers had already shifted export orders worth $250-$300 million to alternative destinations, including Pakistan, as Bangladeshi suppliers failed to assure them of timely shipment of orders due to shortage of raw materials.
People from the sector said that the terry towel sector had been faced with acute shortage of yarn since January as denim makers had started sourcing the item from the local market in a big way instead of importing it to maintain a shorter lead time amid the Covid outbreak.
The same counts of yarns are used in both denim mills and terry towel mills and spinners are finding it more lucrative to do business with the denim mills, they said.
According to the home textile and terry towel sector leaders, 10-single open-end and 16-single open-end yarns are used in the production of both denim fabrics and terry towels.
The yarn for terry towels is produced from a blend of 85 per cent waste cotton and 15 of virgin cotton but the supply of yarn has declined by 50-60 per cent as the spinners are making enough profit from doing business with the denim mills, they said.
‘A total of 113 terry towel factories have been struggling to survive due to a number of crises, including shortage of yarn, price hike of yarn, shortage of gas and lack of quality electricity. Import of yarn at reduced tariff can be the only alternative for the sector to sustain on the global export market,’ Bangladesh Terry Towel and Linen Manufacturers and Exporters Association chairman M Shahadat Hossain told New Age on Saturday.
He said that the BTTLMEA would write to the ministries concerned shortly seeking approval for importing yarn as the local spinners were not able to assure them that they would get the adequate supply of yarn.
‘The government should allow terry towel factories to import yarn at 2-4 per cent duty or under bank guarantee so that we can deliver the export orders in time,’ Shahadat said.
The BTTLMEA on Thursday held a meeting with leaders of the Bangladesh Textile Mills Association to resolve the yarn crisis yarn but the spinners did not give any assurance regarding the availability of the item for supply.
Sources at the meeting said that the BTMA leaders had assured that the prices of yarn would remain stable and they would try to increase their capacities to meet the demand for terry towel factories in the coming days.
The BTTLMEA chairman claimed that the BTMA leaders had also agreed to the proposition that the towel makers should import the item to meet their demand for the time-being.
Shahadat said that if the sector continued to face a shortage of yarn, most of the orders would be shifted to Pakistan, the main competitor of Bangladeshi terry towel on the export market.
According to the data of the Export Promotion Bureau, export earnings from home textiles grew by 49.17 per cent to $1.13 billion in the financial year 2020-21 from $758.91 million in FY20.
The sector was the third highest export earning sector of the country in FY21.
