Yarn manufacturers in Bangladesh are grappling with unsold stocks. Demand for locally manufactured yarn and fabrics have fallen amid decreased work orders. On the other hand, fabrics imported illegally by apparel makers by misusing the bonded warehouse facilities are taking a toll on the sector. It was assumed that work orders would flow into the sector due to the ongoing US-China trade war. But it has not happened as China has offered its manufacturers incentives while fabrics and yarn are entering Bangladesh by way of wrong declarations.

Apparel makers in Bangladesh prefer imported yarn and fabrics, which are cheaper than what’s made within the country. Bangladesh’s currency has gained against the dollar and eaten up the competitive edge. China and other countries offer better prices on yarn and fabrics as they have devalued the dollar while they have their own cotton against Bangladesh’s zero production.

There are 430 yarn manufacturing mills, 802 fabric manufacturing mills, and 244 dyeing-printing finishing mills in Bangladesh. In August, the apparel sector, which accounts for 84 per cent of national exports, witnessed a 11.46 per cent decline. Global buyers are not placing orders as the production cost in Bangladesh has gone up due to the new wage structure.