Cotton yarn prices are falling in Bangladesh, due to a series of factors including lower cotton prices and slowing down apparel exports. Illegal yarn imports would also depress prices. Bangladesh could now offer Washington to use US cotton in exchange of tariff cuts for its apparel.
Spun yarn prices have further fallen in the past weeks in Bangladesh.
Most used 30s carded cotton has declined to $2.90 cents per kilo, being down 8% in three months.
30s organic cotton has even lost 15 cents in four weeks.
According to spinners, illegal imports from India and China would have flooded the market with cheap products.
Downward demand from knit apparel producers and from weavers could have also weakened, due to slowing down apparel exports from the low-cost country.
Cotton prices have also declined in the last month on the international market, meaning that material costs have dropped at yarn plants in Bangladesh.
Cotton use is still expected rising in the current season 2018-19 (August-July), according to the US Department of Agriculture (USDA).
Bangladesh is the largest importer of cotton fibers in the world, in line with an impressive development of its yarn industry.
Spinners have benefited from EU’s rules of origin allowing duty-free access when domestic yarn is used.
They would like now US trade negotiators to grant a tariff reduction for Bangladeshi apparel when they are made of domestic yarns using US cotton.
Cotton imports from the United States only accounts for a very small share of the market and could sharply rise if such a deal is settled.
On the other hand, Washington has always refused to expand its GSP regime to apparel in the past decades by contrast with EU’s trade policy favoring low-cost countries.
Source: Emergingtextiles
