As the yarn price is continuously increasing Bangladeshi readymade garment (RMG) exporters now fight to secure the break-even costs.
RMG manufacturers expressed that while they were getting the orders in July-August, they never thought that the yarn price would jump this much. And costlier yarns would drive many of the garment-makers to losses as the export orders would ultimately turn out to be bank liabilities.
Since the start of this year, international cotton prices were on the rise, increasing yarn and fabric prices. The latest US Commodity index per pound data shows that on 3 December – cotton prices were at $1.10 down from $1.20 on 9 November.
Though, numerous apparel makers said that they have been purchasing yarns at $5-$5.10 per kg for the last few weeks.
They also noted that they were now paying extra for other raw materials such as dyes, chemicals, and apparel accessories.
According to the BGMEA, some of their member manufacturers have put a hold on yarn purchases thanks to the turbulent market.
According to media reports, some claimed that a few of the spinners now have stopped issuing proforma invoice (PI) – a preliminary bill or projected invoice which is used to request payment from the committed buyer for goods.
In light of this scenario, BGMEA asked its members not to take any orders without calculating the revenue margin.
