Bangladesh textile manufacturers are losing business worth more than $6 billion annually in the domestic market due to smuggling of yarn and fabrics into the country and misuse of bonded warehouse facility, industry people said.
They said that the sector was facing a survival crisis as the spinning and weaving mills were sitting on stockpiles of yarn due to lack of demand for local items.
Local spinners said that along with smuggling and misuse of bonded warehouse facility, high interest rate of bank loans and increased price of gas were also cutting the competitiveness of the sector.
‘The size of domestic market of fabrics is 7 to 8 billion metres worth $11-$12 billion. Of which, local producers meet only 3 to 4 billion metres worth nearly $6 billion and the rest of the demand is met by smuggled fabrics and bonded warehouse fabrics,’ Bangladesh Textile Mills Association president Mohammad Ali Khokon told New Age on Monday.
He said as per the statistics the commercial import of yarn and fabrics was very negligible but more than 50 per cent of the local demand worth more than $6 billion was being met by foreign items.
Market situation suggests that smuggling of fabrics into the country and misuse of bonded warehouse are taking place in a big way, Khokon said.
He informed that operation in more than 40 per cent of spinning and weaving mills remained suspended due to lack of demand for local items.
The BTMA president also said that huge quantity of dresses including saris, three-pieces and other shirting clothes were entering into Bangladesh illegally through border markets from neighbouring countries and the items were being brought to the Dhaka city.
‘We are in dire straits for last few years due mainly to smuggling and illegal import of fabrics through misusing bonded warehouse facility,’ said Shahid Alam, vice-chairman of Jalal Ahmed Spinning Mills Ltd.
He said although commercial imports of fabrics were negligible in quantity due to high import duty, saris, three-pieces and other clothes from the neighbouring countries were sold in huge quantity in Bangladesh.
‘We have been alleging for long over the smuggling and misuse of bonded warehouse facility but the situation has remained unchanged,’ Shahid said.
He said along with smuggling, import of yarn through misdeclaration evading taxes, high rate of bank interest and 400-per cent increase in gas prices in last four years were hitting hard the textile sector.
Shahid said that the price of 80 count of yarn was Tk 520 a kilogram and the price of 30 count of yarn Tk 235 a kg.
Some businesses are often importing 80 and 60 count of yarn declaring those as 30 count of yarn, he alleged.
‘If you go to Islampur in Old Dhaka, you will easily see that fabrics imported under bonded warehouse facility are being sold in the open market while illegally imported yarns are being sold at Madhobdi Bazar in Narshingdi,’ he said.
Bangladesh Chamber of Industries president Anwar-Ul Alam Chowdhury Parvez on Monday said that country’s primary textile sector was losing its competitiveness due to misuse of bonded warehouse facility and increasing doing business cost.
‘We have long been requesting National Board of Revenue to introduce software to prevent misuse of bonded warehouse facility but, NBR officials somehow are unwilling to automate the system,’ he said at a press conference held in Dhaka.
Source: New Age.