Costly Cotton To Hit Bangladesh Apparel Exports.

The apparel sector, Bangladesh’s largest export earner, may be hard hit due to high cotton prices on the global market which could also weaken its competitiveness, a business leader said on Thursday.

“Abnormal price hike of cotton, the basic raw material of apparel sector will also reduce our profit margin significantly,” said Abdus Salam Murshedy, president of Bangladesh Garment Manufacturers and Exporters Association.

The price of cotton jumped to $2.46 a pound on Thursday in the international market, almost 150 percent up from a year ago.

“It will prompt sharp rise of cost for both denims and other textile products,” Murshedy told a news conference. Many local spinning mills are facing a severe working capital crunch due to the record surge in prices of raw cotton, which had rarely traded higher than $1.0 a pound over the past three decades, the official said.

Since January cotton prices have risen more than 40 percent because of soaring demand from China, poor cotton harvest in Pakistan and export restriction in India, leading to acute supply shortages. The textile exporters said they incurred losses up to 20 percent for the orders taken in January or earlier. The profit margins of sweaters and denims are shrinking fast following price hike of yarns and also wage increases for workers.

Source : thenews.com.pk