Spun yarn prices could now further decline in Bangladesh after cotton and polyester prices have sharply dropped in the past weeks. Yarn prices have continuously fallen in the past 12 months over a new rise of domestic capacities and an illegal use of consigned yarn imports on the domestic market.
Cotton yarn prices have relatively resisted in the last weeks in Bangladesh, however showing signs they could now decrease, in line with the recent fall of cotton prices on the international market.
With cotton import prices inevitably falling, cotton yarn prices will probably follow the same downward way.
30s carded knitting is now being offered at $2.85 per kilo by most spinners whereas 30s organic is offered at $3.10.
Cotton yarn prices have continuously dropped over the last 12 months, although cotton prices have moved into different directions in the meantime.
Bangladeshi spinners are currently confronted with a new rise of capacities in the country which have further gained 6.1% in the past year after growing by 6.5% in 2017.
In the past 12 years, spinning capacities have surged 139%.
The average production level per plant has also sharply increased over the period (see below table), reflecting capacity expansion by largest producers and the higher productivity of most recent facilities.
Bangladesh should experience a new rise of 5% in cotton imports and use in the next cotton season (August 19-July 20), according to the US Department of Agriculture (USDA).
The country has already become the fourth largest consumer of cotton in the world, only after China, India and now not far from Pakistan.
Cotton imports from Brazil have surged in the past months, as observed on other importing markets.
Shipments from Western Africa have also taken a larger share in the last year, to the detriment of Indian exporters.
Domestic spinners continue complaining about illegal yarn imports with knitters allegedly using bonded warehouses to fraudulently resell yarn imports on the domestic market.
This system based on widespread corruption could partly explain the fall of cotton yarn prices in the country, according to a recent report by the US Department of Agriculture.
Source: Emergingtextiles
