Bangladesh's textile production plummets in Q1

18 Apr '12

2 min read

The textile sector of Bangladesh has witnessed a major fall in production during the initial three months of the current year.

Hit by the European Union's (EU) relaxed rules of origin and gas and power supply shortages, Bangladesh' textile industry suffered a 25 percent year-on-year decline in production, which dipped to 1,900 million metres in January-March 2012, compared to textile production of 2,536 million metres achieved in corresponding period of previous year.

Taking advantage of the EU's relaxed rules of origin, several garment producers in Bangladesh are now procuring raw material from China, instead of buying domestic quality fabric, which is a major factor for decline in fabric production in Bangladesh.

The dip in production is also attributable to an extent to shortage of gas and power supply, lack of modern communication system and depreciation of taka against dollar.

Liquidity crisis in banks and high rate of interest on loans are also to be blamed for the production slump, according to industry experts, who say that the dismal situation has pushed many small and medium scale textile units on the brink of closure.

As per a survey undertaken by the Ministry of Textiles and Jute, textile units in the country were catering to almost 40 percent of the domestic demand till financial year 2009-10 when 2,542 million metres of fabric was produced in Bangladesh against total demand of 5,612 metres.

The same study also stated that following a rise in demand for Bangladeshi readymade garments (RMG) in world market, the demand for woven fabrics is expected to grow to 7,164 million metres by 2014-15.

Fibre2fashion News Desk - India

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