India's ban on cotton export to hurt spinners.

Spinners will face yet another blow due to a sudden ban on cotton export by India, as Bangladesh is one of the major consumers of Indian cotton, businessmen said.

The Indian government on Monday imposed the ban mainly to build up its domestic stock amid fears of a low yield this year due to unfavourable weather.

India is the second largest cotton producer worldwide and Bangladesh imports 35 percent of its total consumption from India per year.

The monthly consumption in Bangladesh is 60,000 tonnes, people involved in the industry said.

According to media reports, the Indian decision has also affected the prices on the international markets.

The prices, which were at 90-91 cents per pound even a few days back, jumped by 3.33 percent in the New York futures trading yesterday.

India slapped the ban for the first time this year, while temporary bans have been imposed several times over the last two years.

Razeeb Haider, managing director of Outpace Spinning Mills Ltd, said the Indian decision will definitely delay production at garment factories as the spinners will have to look for alternative markets of cotton.

“India is an easy option for Bangladeshi cotton importers. It takes shorter lead-time compared with other cotton producing countries,” Haider said.

The Indian decision will further endanger the spinning sub-sector, which was just turning around from last year's price shocks stemming from the international market, he said.

The Bangladeshi spinners are still burdened with the unsold stockpile of yarn, churned out from costly cotton last year.

The spinners bought cotton at higher prices, mostly at $2.35 per pound, from the volatile world market last year. But, the price came down suddenly with a fall in prices of yarn worldwide.

“Probably India wants to sell yarn to Bangladesh at higher prices, adding more value by processing the raw cotton,” he added.

Echoing the view of Haider, Chairman and Chief Executive Officer of Purbani Group Abdul Hai Sarker said the sector was returning from last year's price shocks as the demand for local yarn was increasing, but the Indian ban will again destabilise the market.

“Of course, the decision will have a negative impact on our spinning sub-sector,” he said.

The Bangladesh government should move fast so that such Indian policies do not hurt local industries, he said.

The spinning sub-sector with nearly 10 percent year-on-year growth now supplies 90 percent raw materials to the knitwear and 40 percent to the woven garment makers from 385 spinning mills, 721 fabrics manufacturing units and 233 dyeing, printing and finishing units.

Jahangir Alamin, president of Bangladesh Textile Mills Association, said such a ban is taking place regularly over the last few years, taking a toll on the Bangladeshi industries.

He said he fears a shortfall of raw materials due to the Indian decision.

“I urge the government to stop import of Indian sub-standard yarn as a section of traders will try to make a brisk business cashing in on the ban,” he said.

Source : thedailystar.net