Cotton consumption will increase by 10-15 percent in 2013 on the back of higher ready-made garment exports, industry insiders said yesterday.
“RMG exports are displaying a distinct upward trend, which will increase demand for cotton,” said Jahangir Alamin, president of Bangladesh Textile Mills Association (BTMA).
In July-November, knitwear exports increased year-on-year by 1.74 percent, woven by 10.16 percent and home textile by 0.59 percent, according to data from the Export Promotion Bureau.
Last year, Bangladesh consumed 3.9 million bales (1 bale equals 440 pounds) of cotton worth around $1.6 billion, the data from BTMA shows.
With the fall in the price of raw cotton globally, the price of yarn has also declined to a rational level in the local market, the industry leaders said.
Currently, the widely consumed 30-count yarn is selling at $3.6 per kilogram in the world market and at $3.7 per kg in the local market, the BTMA data showed.
“But higher consumption of cotton is depending on adequate supply of gas and power in the industrial units,” Alamin said.
The country's 385 spinning mills are running at 70 percent of production capacity due to lack of adequate utility supply to the industrial units, he added.
“As a result, the spinners cannot produce yarns as per demand from local knitters and weavers.”
At present, the spinning sub-sector or primary textile sector (PTS) can supply 90 percent of the fabrics for the knitwear sub-sector and 40 percent for woven sub-sector, according to the industry people.
Moreover, the local knitters and weavers are increasing the consumption of fabrics from local spinners due to the shorter lead-time and lower transport costs.
Alamin said the previous inventory is fast clearing, so the yarns the spinners are now producing are selling at competitive prices.
“But we have suffered a tremendous loss from the sale of old stock of yarn as the cotton was purchased at an average of $2.50 per pound two years ago,” said the BTMA chief.
A Matin Chowdhry, managing director of Malek Spinning Mills, a major cotton importer, said there is no possibility of a cotton crisis this year due to the harvesting of new crops and safety net of old stock.
Moreover, the largest cotton consuming country, China, will reduce cotton import to 11.5 million bales from its previous year's import at 24.5 million bales due to old stock, he said.
“As a result, the whole world will witness availability of cotton this year,” he said.