Prices of yarn, the main raw material for garment items, will go down a bit as owners of spinning mills and the apparel industry have agreed to set a maximum price limit.
According to the newly fixed price, per kg 30 count of yarn widely used in the knitwear industry will be sold at $4.20.
The decision was made at a meeting of top leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and the Bangladesh Textile Mills Association (BTMA) on Saturday night.
The meeting was attended by BGMEA President Faruque Hassan, BKMEA President AKM Salim Osman, Vice-President Mohammad Hatem, former BGMEA president Kutubuddin Ahmed and several senior leaders in readymade garment and textile sectors.
According to the sources present at the meeting, the price of yarn from now on will be fixed in accordance with the current price of cotton in the international market.
Besides, a benchmark will be set in this regard, which will be decided by a committee comprising representatives of both organisations.
On condition of anonymity, a garment leader who attended the meeting held at a hotel in the capital's Banani told The Business Standard that the maximum price of yarn has been fixed and therefore yarn prices will go down slightly compared to the present market price.
Another leader said yarn used in knitwear is currently being issued starting from $4.25 to $4.40 as PI (proforma invoice or a price offered by the seller). As such, if the price is set at $4.20, it can be assumed that the price will go down a bit.
Meanwhile, owners of readymade garments and other industries are hoping that the decision may help the prices to go down for yarn of other counts as well while creating an opportunity for stability in the yarn market.
When contacted, BTMA President Mohammad Ali Khokon told TBS that it has been decided to fix the price of per kg yarn at $4.20.
"Currently most spinning mill owners are selling yarn at this price. Some may be selling for $4.25. However, we have agreed that if the price of cotton in the world market goes above $1 per pound or falls below $85 cents, the price of yarn will be re-determined on this basis," he added.
Kutubuddin Ahmed said a logical solution had come to the meeting. However, he did not agree to give any details in this regard.
Yarn prices in the country have been rising for the past eight months as cotton prices have risen in the world market.
Local garment industry owners complained that the country's spinning mill owners have increased the price of yarn at an unusual rate, while the textile owners argued that the price of yarn is being increased in line with that of cotton.
When the debate between them became clear, the senior leaders of both parties started looking for a way to reach a solution.
Meanwhile, the BGMEA has written to the ministries and departments concerned with the government to facilitate the import of yarn. In a reply letter to the National Board of Revenue (NBR), the BTMA expressed its concern.
The BTMA president also spoke to reporters on Saturday.
BTMA leaders claimed that the price of cotton in the international market has increased by 47% in the last nine months from December last year to August this year. In contrast, the price of yarn in the country's market has increased by only 37%. The price of yarn has been selling at above $4 since last March.
Mohammad Ali Khokon said BTMA has already informed their members about the Saturday meeting's decision.