Yarn import jumps 13% as local production stops
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Bangladesh's textile and spinning mills are struggling to produce yarn due to a lingering gas crisis which has led to a jump in yarn imports of about 13% as fabric and apparel makers look elsewhere to meet the demand.
According to data from the Bangladesh Bank, the apparel industry imported yarn worth $2.64 billion in the July-April period of the just-concluded fiscal year, compared to products worth $2.34 billion during the same period in FY23.
Apparel exporters said the garment industry is facing a double whammy. Local textile mills and garment makers have been forced to increase imports despite the prevailing dollar crisis. Recent cuts to government incentives may further encourage imports. This reliance on foreign yarn could hurt the value addition of the RMG sector.
The gas supply crisis has also become a critical component in this situation. Typically, garments and textile mills require around 8-10 pounds per square inch (PSI) of gas pressure to run at full capacity.
However, gas pressure drops to 1-2 PSI during the daytime, significantly impacting production which continues even into the night in the major industrial zones, according to the Bangladesh Textile Mills Association (BTMA).
Low gas pressure has crippled production forcing 70-80% of mills to operate at around 40% of their capacity, industry owners say.
"We have been grappling with gas shortages over the past year, and our production has gradually declined. However, production has now plummeted below 40% of our capacity as the crisis intensified over the last month," said Rajib Haider, managing director of Outpace Spinning Mills Ltd, located in Mawna, Sreepur, while speaking to TBS.
The gas crisis is especially severe in areas such as Tongi, Joydebpur, Sreepur, Bhaluka, Araihazar in Narayanganj, Palash, Madhabdi, Madanpur, Savar, and Ashulia,
Mohammad Ali Khokon, president of BTMA.
"Despite having orders, spinning mill owners are concerned about meeting supply deadlines," If spinners fail to supply yarn on time, garment owners may be forced to import yarns, he added.
The entrepreneur also noted that reduced production has raised costs and reduced cash flow, making it challenging to pay workers' salaries and allowances on time.
Source: TBS
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