Despite having capacity to deliver, local apparel exporters are facing difficulty in grabbing the opportunity of increased work orders because of the rise in yarn prices, industry leaders said.
With the reopening of stores followed by mass vaccination, retail sales grew sharply in Europe and the US. As a result, more work orders are coming to Bangladesh, they pointed out.
Expressing concern over the rising yarn prices in the local market, they said many apparel makers are even taking orders at a rate below their production costs as a result of price hike.
Apparel sector leaders expressed their observation at a meeting held at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) office in the city on Sunday, according to a statement.
Chaired by BGMEA President Faruque Hassan, the meeting was attended by Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) first vice president Mohammad Hatem and its director Fazlee Shamim Ehsan and Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA) chairman M Shahadat Hossain.
BGMEA vice presidents Shahidullah Azim and Khandoker Rafiqul Islam, directors Asif Ashraf, Md Mohiuddin Rubel, Abdullah Hil Rakib and Rajiv Chowdhury, and former director of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Ashikur Rahman Tuhin, among others, also spoke.
The meeting was informed that local mills are increasing yarn prices every day and providing proforma invoice (PI) with a short time-limit, which makes it difficult to open LC in such a short time.
As it takes around 15 days to confirm orders, apparel manufactures could not take many orders despite having capacity to deliver, the statement said.
Even many factories are taking work orders under breakeven point only to stay afloat, industry leaders said.
Buyers do not increase apparel prices as they only look at FOB (freight on board), they said, adding that the rising yarn prices have hit the competitiveness of the local RMG industry.
The meeting decided to sit with government policymakers to find a way towards ensuring reasonable prices of yarn in the local market.
Munni_fe@yahoo.com