Textile millers in Bangladesh have stacks of unsold yarns and fabrics. The reason: invasion of cheap Chinese substitutes. A section of unscrupulous traders import yarn illegally. For example, they open letters of credit for importing one truck of yarn but they end up importing more due to lack of proper monitoring at the land port.
If illegal imports are not checked, millers fear the factories’ inventories will soar and they will feel discouraged to continue production. About 30 per cent of their inventory is unsold. Spinners, who can meet 85 per cent of the demand from the knitwear sector and 35 per cent from the woven sector, have already slashed production by 40 per cent because of this.
Another problem afflicting the textile millers is that a section of unscrupulous traders have been selling goods imported under the bonded facility. Imports of duty-free goods under the bonded facility are allowed only for export-oriented garment factories. Some businesses are importing yarns and fabrics under the bonded warehouse facility and later on selling the duty-free items in the open market at low prices.
Bangladesh frequently hosts yarn shows, which introduce the latest sophisticated yarn, fabrics, accessories and emerging technologies for textile and garment industries.