Rising cotton prices is impacting Bangladesh’s knitwear exports. As per RMG Bangladesh, 30 carded yarn is now available at $3,60 to $3,75 per lb whereas just two earlier it was available for $ 2.60 to $2,80 . Local spinners, merchants, millers and consumers mostly import cotton from the future markets, which supplies 50 percent of the annual 75 lakh bales Transportation charges contribute to the expense of the local importers, which also affects yarn prices.

A major cause for inflation is the growth in imports from China, which is the world’s largest market. Furthermore, import targets have risen as a result of high prices in China and lower demand in Pakistan. A report by the US Ministry of Agriculture (USDA) states, in the cotton marketing year (August–July) 2020-21 Bangladesh will slash imports of 5 lakh bales.

As the effect of Covid-19 becomes clearer, global utilization outlook for 2020-21 has shrunk. However, in recent months usage has risen as components of the global economy have stabilized and is just 3 per cent below the February stage now. With worldwide downward projection and production relatively unimpeded, the projected end of the inventory by 2020-21 is 97.5 million bales higher than in February, 19 per cent (15.4 million bales).