Cotton import grows despite pandemic
Bangladesh's cotton imports grew by about 9 % to 75 lakh bales in the 2019-20 marketing year (MY) regardless of the ongoing coronavirus pandemic, according to data from the United States Department of Agriculture (USDA).
The cotton marketing year commences in August and leads to July and one bale equals to 480 pounds.
The high demand for cotton through the first half of the year combined with the country's success in combating Covid-19 has allowed the garment sector to keep up businesses despite a few short-term disruptions.
US cotton exports to Bangladesh in MY2019-20 reached 1.06 lakh bales, up 28.9 % from MY2018-19. The US cotton industry share was approximately 14 % in MY2019-20, which can be second to India's 23 % market share.
For MY2020-21, cotton imports will slightly lower to 71 lakh bales presented the uncertainty in global demand and relatively low import in the first of all months of the entire year, the report said.
"Cotton imports continued actually amid the ongoing crisis because so many consignments were signed earlier but imported later on," explained Monsoor Ahmed, secretary to the Bangladesh Textile Mills Association (BTMA).
Sales in the principal textile sector were disrupted through the Covid-19 outbreak in April-May but when the marketplaces reopened, the sales began to peak up again.
This is especially the case for the weavers and spinners that serve local markets, he added.
The ongoing pandemic has disrupted Bangladesh's textile and apparel industry, producing a sharp decline in the sector's exports to major markets, including the US and EU. Preliminary data from the Bangladesh Export Promotion Bureau implies that the export worth of apparel in the earliest 10 months of 2020 dropped 19 per cent year-on-season to $22.4 billion.
On the other hand, this decline was less than the forecast made by the industry authorities in May 2020 as Bangladesh's success in combating Covid-19 possesses allowed companies to maintain businesses despite a few short-term disruptions.
The decline in apparel exports is because a depressed global demand, increased competition from Vietnam and heightened production and safety standards in Bangladesh's garment industry.
The sector's export value dropped 85 % in April and 62 per cent in May year-on-year in 2020.
Bangladesh's yarn production is recovering following a protracted amount of market disruption aswell.
In line with the Trade Data Monitor (TDM), the worthiness of Bangladesh's cotton yarn exports in the first 10 months of 2020 dropped 27 per cent year-on-yr to $11.3 million.
With Bangladesh's domestic yarn demand rebounding over the past 3 months, the local spinning industry expects cotton yarn development will continue to see great growth consequently of the increased demand for knitwear exports.
Bangladesh's yarn exports fell 27 per cent in 2020, the record said, adding that the price tag on yarn possesses increased substantially more than the August to October timeframe due to an uptick in garment demand prior to the upcoming holiday season in the EU and US.
Through the initially nine months of 2020, the worthiness of cotton yarn imports was above 12 per cent at $692 million compared to $617 million in 2019.
China alone has exported more than $148 million worth of cotton yarn to Bangladesh days gone by calendar year and above $225 million in 2019.
In a report, the BTMA stated there were a lot more than 433 spinning mills functioning in Bangladesh in 2019 with a combined creation capacity of 2.9 million tonnes of yarn each year.
Regardless of the large domestic spinning capacity, Bangladesh imported a lot more than $850 million worth of cotton yarn in 2019.
Bangladesh features import duties of 5 % for man-made fibre, 25 % for fabric, and 10 % for yarn.
While seemingly large, export-oriented garment factories may import yarn and fabric under a duty draw back incentive, which reimburses all customs duties paid on imported yarn and fabric, except taxes such as the VAT and advanced income tax.
The down side incentive programme permits Bangladesh to go for large imports of cotton yarn and fabric from India and China.
Earlier forecasts showed that the country's cotton consumption would drop sharply on the second 50 percent of MY2019-20 and continue steadily to decline in MY2020-21 as a result of Covid-19 fallout.
Even so, Bangladesh's cotton consumption, reflected simply by cotton imports and domestic demand for cotton yarn, has remained strong because of Asia's overall success in combating Covid-19.
Domestic consumption of apparel and textile products has been mildly influenced by the cancellation of large events just like Pahela Baishakh, the primary day of Bangla different year, and the Eid festivals that often promote clothing sales.
But overall, the unfavorable impact of Covid-19 has been less than forecast, the article said.
