The apparel industry is Bangladesh’s largest source of export revenue. Due to high global cotton prices, Bangladesh’s garment industry may be hit and weakened, a business leader said on Thursday.
AbdusSalamMurshedy, Bangladesh Garment Manufacturers and Exporters Association, said that the abnormal increase in the price of cotton, the basic raw material for garments, will significantly reduce the profit margin of the garment industry.
On Thursday, the cotton price in the international market rose to 2.46 US dollars per pound, almost 150% higher than a year ago. The prices of denim and other textile products have risen sharply.
As the price of raw cotton hit a record high, the actual transaction price increased by 1 US$/lb over 30 years, and many local spinning mills are facing serious tightening of liquidity.
Since January 2011, the price of cotton has risen by more than 40% because of the surge in demand from China, poor Pakistani cotton harvest, and restrictions on exports from India, resulting in a sharp shortage of cotton supplies.
Textile exporters said that the orders they received in January or earlier caused 20% loss.
With the increase in yarn prices and the increase in workers' wages, the profit rate of sweaters and denim fabrics has shrunk rapidly.
Bangladesh is the second largest cotton importer in the world.
Textiles and garments are the main export products of Bangladesh. As of June 2010, the export value reached 16.2 billion U.S. dollars, or 80% of the export revenue for the fiscal year that year.
Bangladesh imports 60% of cotton demand each year, 5 million bales come from Uzbekistan, and Uzbekistan is the third largest cotton exporter in the world. Bangladesh also imports cotton from Russia and the United States, worth more than $1.5 billion.
AbdusSalamMurshedy, Bangladesh Garment Manufacturers and Exporters Association, said that the abnormal increase in the price of cotton, the basic raw material for garments, will significantly reduce the profit margin of the garment industry.
On Thursday, the cotton price in the international market rose to 2.46 US dollars per pound, almost 150% higher than a year ago. The prices of denim and other textile products have risen sharply.
As the price of raw cotton hit a record high, the actual transaction price increased by 1 US$/lb over 30 years, and many local spinning mills are facing serious tightening of liquidity.
Since January 2011, the price of cotton has risen by more than 40% because of the surge in demand from China, poor Pakistani cotton harvest, and restrictions on exports from India, resulting in a sharp shortage of cotton supplies.
Textile exporters said that the orders they received in January or earlier caused 20% loss.
With the increase in yarn prices and the increase in workers' wages, the profit rate of sweaters and denim fabrics has shrunk rapidly.
Bangladesh is the second largest cotton importer in the world.
Textiles and garments are the main export products of Bangladesh. As of June 2010, the export value reached 16.2 billion U.S. dollars, or 80% of the export revenue for the fiscal year that year.
Bangladesh imports 60% of cotton demand each year, 5 million bales come from Uzbekistan, and Uzbekistan is the third largest cotton exporter in the world. Bangladesh also imports cotton from Russia and the United States, worth more than $1.5 billion.
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