Local spinners have urged the government to introduce a provision in the yarn import rules, which will make it mandatory for the export-oriented readymade garment factories to procure 70% of their total cotton yarn requirements from the local spinning mills under back-to-back letters of credit (LCs) to ease the existing dollar crisis.
The Bangladesh Textile Mills Association in a letter to National Board of Revenue chairman Abu Hena Md Rahmatul Muneem on December 12 made the demand, saying that if apparel were produced with local yarns, the value addition would be 65% while it would be 30% when produced with imported yarns.
The BTMA in its letter said that the local spinners produced export-standard carded and combed yarns in huge quantities and they could meet 85% of the total demands of the export-oriented apparel industry.
The BTMA letter, signed by its president Mohammad Ali Khokon, also urged the NBR to scrutinize the compatibility of the import price of yarns with other competitor countries before releasing the goods from ports.
The BTMA said that the price difference between the local and imported yarn was not more than $0.15-$0.25 a kilogram as Bangladesh depended on imported cotton and other components for producing yarns and a neighbouring country having raw materials could export yarns at lower prices.
The BTMA in its letter proposed installing yarn count testing machines at land ports and recruiting more workforces with required training to protect revenue losses.
According to the BTMA, Bangladesh imported 0.793 million tonnes of yarns in FY23 financial year, while the figure was 0.588 million tonnes in FY20.