The textile millers of the country have experienced a downturn due to a sharp fall in demand for RMG products amid the global economic slowdown.
It has caused enormous losses for the textile millers.
According to the media reports citing industry insiders, most of the spinning factories have enormous stocks of yarn as the sales decreased significantly.
Moreover, they are forced to suffer an average loss of $0.70 per kilogram and become unable to turn a profit.
The recent hike in the price of gas and power has put additional strain on businesses.
According to various reports, some of the capital market-listed textile factories have experienced a fall in profits.
Media reports claimed that in such a situation, the Bangladesh Textile Mills Association (BTMA) held an emergency meeting recently in the presence of several leaders who expressed concern about yarn stockpiles.
Speaking to the media, Mohammad Ali Khokon, president of BTMA said that the price of yarn has decreased due to a decline in demand.
He also claimed that every kilogram of cotton yarn processed at a cost results in a loss and the cotton and yarn are almost the same price right now.
Md Fazlul Haque, vice president of the BTMA said that a lot of yarn is stocked up even when factories are operating at 50% to 60% capacity as orders have declined by around 35%.
The cost of yarn is constantly falling because of the decline in demand which causes a loss of around $0.7 per kg of 30 counts of yarn.
Textile millers also claimed that they were unable to detect any signs of improvement in the orders downturn in the coming months.
Insiders of the apparel sector said that they have reduced the purchase of yarn or fabric as they haven’t enough orders.
On Thursday, BGMEA President Faruque Hassan said that they do not have enough buying orders in their hands and the Buyer’s Forum also obscured the future.
According to the Export Promotion Bureau (EPB), exports of readymade garments fell by 15.48% in April compared to a year ago.
RMG exporters said that this trend of export decline may continue in the next three to four months.
Moreover, the recent hike in gas prices has also increased losses for entrepreneurs in the textile sector, they said.