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Professor Mustafizur Rahman on RMG export growth

Professor Mustafizur Rahman on RMG export growth, published in the Financial Express on Sunday, 20 October 2013.

BD’s cotton consumption will rise due to export growth of RMG, yarn

FE Report: Shah Alam Nur

Cotton consumption in Bangladesh will increase significantly in the current fiscal year (FY) 2013-14 due to continued export growth of readymade garment and yarn.

Industry insiders said to meet the growing demand for yarn and fabric in the international and domestic markets, cotton consumption will increase nearly by 17 per cent to 0.7 million tonnes in the current financial year.

They also said business relocation by the Chinese and other companies to Bangladesh have been increasing due to cheap labour costs and investment in the textiles sector is also growing leading to rise in cotton consumption.

According to Bangladesh Textile Mills Association (BTMA), the platform for cotton importers and spinners, the country currently consumes 0.6 million tonnes of cotton a year.

“Recently Bangladesh have found some new yarn markets like Thailand and Vietnam which would need additional 0.1 million tonnes of cotton”, BTMA President Jahangir Alamin told the FE. It’s a good news to the country’s textile industry, he added.

He said export of high quality and special cotton yarn is increasing to new markets, so use of cotton in the country’s textile mills has been increasing.

Mr Alamin hopefully said in near future country’s exporters will be able to send cotton yarn to China, the world’s largest apparel supplier.

Country’s textile sector has attracted highest investment thanks to strong demand for fabrics in the readymade garment (RMG) industry.

Country’s RMG sector is a ready market for textile goods, so investors’ interest is on the rise, industry insiders said.

Board of Investment (BoI) data show a total of 1457 fresh investment proposals were registered from local investors in the last fiscal year 2012-13 and most of them have shown their interest in textile sector.

It also said a total of 523 industrial units in textile sector have registered with BoI with an investment of Tk 172 billion.

Executive director of Centre for Policy Dialogue (CPD) Mustafizur Rahman told the FE that many apparel makers from China, India and Sri Lanka are eyeing Bangladesh so demand for yarn and fabric is increasing.

He said country’s textile sector has a bright prospect but poor infrastructure is a big barrier to its growth.

He said when an investor wants to go for fresh investment in textile sector, primarily his/her requirements are gas, electricity and good communications —- but they do not get those facilities.

BoI director Ali Kador told the FE that textile sector is gaining popularity among the local and foreign investors because the export-oriented industries have been enjoying various incentives like tax-free facilities, tax holiday, warehouse facility and others.

Export Promotion Bureau (EPB) data showed the government has targeted $24.14 billion from RMG exports in the current fiscal, which was $21.53 billion in the FY 2012-13.

Bangladesh has exported RMG goods worth $6.20 billion in the first three months of the current fiscal year.

The country’s knitwear items fetched $3.16 billion in July-September of 2013, registering a 25.24 per cent growth over the corresponding period of last year.

On the other hand, export earnings from woven garments rose by 27.02 per cent to $ 3.04 billion in July-September of 2013.

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