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Raw-material imports, including yarn and fabrics, especially knit fabrics, surged significantly in the last fiscal year as domestic supplies declined for adversities.
Exporters attribute the switch -- pushed by buyers' urgency for time factor -- to high cost of local ones, gas shortage and a cut in cash incentives.
According to Bangladesh Textile Mills Association (BTMA) data based on NBR counts, knit fabric imports increased by 32.18 per cent as the country imported about 0.51 million tonnes of knit fabrics in last fiscal year (FY 2024-25), in a rise from 0.38 million tonnes in the previous fiscal of 2023-24.
Besides, 0.62 million tonnes of woven fabrics were imported in the fiscal 2024-25 which was 16.12 m-percent higher than the import of 0.54 million tonnes in 2023-24.
On the other hand, yarn imports rose to 13.35 per cent as the country brought 1.24 million tonnes of yarn in the fiscal 2024-25 which was 1.1 million tonnes in 2023-24, according to data.
Bangladesh imported 8.35 million bales of cotton last fiscal against 7.75 million bales in the previous.
The country earned US$ 39.34 billion from ready-made garment exports in the last fiscal year-US$ 21.15 billion fetched by knitwear and US$18.18 billion by woven items, according to Export Promotion Bureau (EPB) data.
Asked about the trade situation, Mohammad Hatem, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), apprehended that the import of yarn and knit fabrics would further rise.
"One of the main reasons is poor gas supply, and due to gas crisis, we could not use our full production capacity," he told the FE on Saturday.
"As a result, buyers are now nominating imported fabrics from China as local production is hampered and cost also went up for many factors," he explains.
"Besides, the cut in cash incentives last year also fuelled the import," he says, adding that cash-incentive support has virtually ended as exporters feel discouraged from claiming the facility, which, according to him, is a lengthy process with lots of "harassment".
"Some 0.3 per cent of cash incentive against exports using local raw material is difficult to get as it takes one and a half years while we face harassment in getting it," Mr Hatem says.
Responding to a question, the BKMEA leader said the rise in fabric imports would also affect export to the US amid the Trump administration's new tariff regimes that also tagged value -addition requirement.
The United States wants a minimum 40-percent local value addition to readymade garments (RMG) to qualify for the 'Made-in-Bangladesh' label alongside a 35-percent tariff on Bangladeshi exports, according to sources.
On April 01, US President Donald Trump formally notified Bangladesh about a flat 35-percent tariff to be applicable to all Bangladeshi exports.
Although the US on April 2 announced reciprocal tariffs on several countries, including a 37-percent duty on Bangladeshi products, the US later imposed a 10-percent flat rate for three months that ended on July 09 but extended until August 01.
Talking to the FE, a number of textile millers said price difference between imported fabrics, mostly from India, and local does not vary much as India offers "dumping rates" due to various facilities given by their government to their textile industry.
Also, cut in cash incentives pushed up the import, they added.
When asked, Khorshed Alam, chairman of Little Star Spinning Mills, however, alleged misuse of bonded facility, saying that "many goods imported under bond facility are sold in local markets".
He further alleged mis-declaration-fabrics used for woven items like T-shirt might be imported under knit items.
"If imports of RMG raw materials-yarn and fabrics-continued to rise, many mills would face closure in next one year," he alerts.
Munni_fe@yahoo.com