Since prices of cotton have begun to fall on international markets, local exporters of ready-made garments are anticipating a significant increase in the number of work orders beginning in December. This is due to the fact that cotton prices have begun to fall. As a result of the declining cost of yarn in the regional marketplaces, local vendors are working toward the goal of selling their wares at rates that are more affordable. On the futures markets on June 28th, the price of a pound of cotton ranged from 92 cents to 1.09 dollars. During the previous month, on the other hand, it ranged somewhere between $1.31 and $1.32.
The high market prices of cotton and yarn, which have an impact on the cost of production at the factory level, had earlier prompted many international retailers to put on hold a significant portion of their work orders. This was due to the fact that the high market prices of cotton and yarn have an impact on the cost of production at the factory level. According to Faruque Hassan, president of the Bangladesh Garment Producers and Exporters Association, when local manufacturers are able to supply garment products at competitive costs due to reductions in the cost of yarn, customers will also begin placing large volumes of work orders again. According to A Matin Chowdhury, the managing director of Malek Spinning Mills, a major spinner and cotton importer, a major impact may be noticed on local yarn sales from December onwards if the current downward trend in international cotton prices continues for the next few months.
This prediction was made by Chowdhury after speaking with other industry leaders. According to Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, “Yarn prices started declining in local markets over the last two months mainly because of a lower volume of work orders being placed by international retailers and brands.” “The main reason for the decline in the volume of work orders placed by international retailers and brands is the lower volume of work orders placed by international retailers and brands,” said Mohammad Hatem.
According to him, this was because there was a reduction in the total number of work orders, which led to a fall in the demand for yarn. Yesterday, the price per kilogram for the frequently used 30 carded yarn ranged between $4.45 and $4.60. The price stayed very stable between $5.25 and $5.30 throughout the months of February and March. Hatem, on the other hand, stated that there is a possibility that the recent drop in cotton prices may not continue on international markets until China begins purchasing cotton in large amounts. As per, Mohammad Ali Khokon, head of the Bangladesh Textile Mills Association, the local spinners have already purchased all of the cotton they will use till October at higher costs.
According to him, this means that the impact of the drop in cotton prices will be able to be felt in the regional markets beginning in December.
Reference:
Mirdha, Refayet Ullah. “Cotton Price Drop May Lift Garment Orders.” The Daily Star, 3 July 2022, https://www.thedailystar.net/business/economy/news/cotton-price-drop-may-lift-garment-orders-3062321
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https://unsplash.com/s/photos/cotton-yarn
