Bangladesh Textile Factories Yet to Benefit from Falling Cotton Prices in International Markets

Release time:

2022-11-21

According to a report by Bangladesh's "Business Standard" on October 22, on October 21, the international cotton price was 0.79 US dollars per pound, a drop of 49% compared with the high price of 1.55 US dollars per pound in May this year.

According to the central bank, Bangladesh imported $3.186 billion of cotton in fiscal year 2020-2021 and $4.439 billion in fiscal year 2021-2022.
Bangladesh is the world's second largest cotton importer, with domestic cotton production meeting only 1% of its demand, mainly from India, the United States, Brazil and African countries. Bangladesh imports 11 percent of its total cotton demand from the United States, according to the Bangladesh Textile Mills Association.

At the same time, the Bangladesh Textile Factory Association said that due to insufficient natural gas supply, textile production fell by 40%. According to the Bangladesh Textile Factory Association, the tight supply of natural gas has affected the production of 90% of textile factories. The output of textile factories in areas with tight natural gas supply, such as Narayanganj, Kumira and Chittagong, has dropped to 30% to 40%, making the price of yarn per kilogram rise to US $1.25.

Due to the appreciation of the US dollar, high cotton prices in the early stage, and the decline in production due to insufficient natural gas supply, Bangladesh textile factories suffered large losses. Textile factories are willing to pay higher gas prices to ensure a stable supply of natural gas for production.

(Source: Ministry of Commerce website)

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