Home / Knowledge / News / Textiles / Bangladesh spinners wary of another gas price hike
Bangladesh spinners wary of another gas price hike
30
Apr '16
Bangladeshi cotton spinners have expressed concern that they may lose their competitive edge if the government carries out a over a proposed gas price hike for captive power plants.

“The spinning sub-sector will be in trouble if the government increases the gas price again. Bangladeshi spinners will face pressures as international yarn producers will then supply products to the local industry at lower prices,” Tapan Chowdhury, President of Bangladesh Textile Mills Association (BTMA) said at a après conference during the World Cotton Outlook Summit in Dhaka this week.

The government has proposed to increase gas price by about 130 per cent to Tk 19.22 per cubic metre for captive power plants from the current price of Tk 8.36.

Gas price was last increased in September 2015 when the government raised it to Tk 8.36 per cubic metre from Tk 4.36. At that time, the profit margin from the sale of yarn declined to below $1 per kg, according to industry insiders.

For sustainability in yarn trade, a mill requires a profit margin of at least $1. But, it has now dropped to below 60 cents.

Local spinners can currently meet 90 per cent of the demand for raw materials of the knitwear sub-sector and 40 per cent of the woven sub-sector. The rest is met through imports, mainly from China and India.

Chowdhury said if the gas price is hiked, spinners will not be able to supply the raw materials to the knitters and garment makers at competitive prices. That would force local garment makers would depend on imported yarn.

The demand for local yarn is higher due to a shorter lead time and better quality, he said.

Currently, more than 400 mills have a spinning capacity of 10 million bales of cotton (one bale is equal to 218 kg). But they cannot use their full capacity due to higher power prices, and inadequate power and gas supply to production units.

Bangladesh currently imports 6.1 million bales of cotton a year, most of it from India. Local growers can supply only one lakh bales. Chowdhury said. Cotton imports from India increased 36 percent year-on-year to 2.99 million bales in 2015. (SH)

Fibre2Fashion News Desk – India


Must ReadView All

Courtesy: European Commission/European Union

Textiles | On 26th May 2018

EU set to negotiate FTAs with Australia & New Zealand

The European Union is all set to begin negotiations for free trade...

US bans import of cotton goods from Turkmenistan

Textiles | On 26th May 2018

US bans import of cotton goods from Turkmenistan

The US Customs and Border Protection (CBP) has issued a Withhold...

FPCCI prepares report on Pakistan's export issues

Textiles | On 26th May 2018

FPCCI prepares report on Pakistan's export issues

Federation of Pakistan Chambers of Commerce and Industry (FPCCI)’s...

Interviews View All

Hannah Lane
Redress

Encouragement from brands will motivate supply chains to become more...

Sachin Sharma
Gem Enviro Management Pvt Ltd

There are no significant differences between virgin yarn and PET recycled...

Top executives
Textile industry

The foremost issue is bridging the skill gap

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Akshat Chaudhary

Aizome, Asia's first Fairtrade denim brand, is all set to launch next...

Harmeet Singh

New Delhi-based Jogindra Industries Private Limited provides an assortment ...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Cigdem Akin
Cigdem Akin

She has carved a niche for herself as the national brand of Turkey. Her...

Sidharth Sinha
Sidharth Sinha

<b>Sidharth Sinha</b> has contributed to the successful rebirth and...

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace that...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


May 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search