Despite the increase in the prices of raw jute as well as the manufacturing cost of jute yarns in the fiscal 2012-13, the country’s yarn exporters are facing losses as the international prices keep falling due to unrest in the Middle East and the Eurozone crisis.
Although the total earnings from jute yarn export is expected to stand higher in the fiscal 2012-13, compared to the earning of its preceding fiscal, the price per unit has been in the downtrend over the same period, observed industry insiders.
Export Promotion Bureau (EPB) data indicate a slight increase in the export earning from jute yarn as the income stood at US$ 46.46 crore until May of the last fiscal, compared to the earning of US$ 46.47 crore in the fiscal 2011-12.
The industry insiders, however, noted that the figure looks high due to the huge increase of export in India and China at a lower price compared to the prices obtained while exporting yarns to the Middle Eastern and the Eurozone countries.
The demand from the most valued buyers of Bangladeshi yarn and twine, that include Turkey, Syria and Iran, have come down sharply over the last couple of years, leading to the partial relocation of the country’s export to Indo-China, but with a lower profit, they observed.
Bangladesh Jute Spinners Corporation (BJSA) secretary Shahidul Karim told UNB that the carpet weaving industries in Turkey Syria and Iran have reduced carpet production in the face of the recent political unrest in the Middle East and the economic recession in the Eurozone.
“The carpet-weaving countries are the main buyers of yarn. The carpet weaving industry in Trukey is reported to have cut the operation by 60 percent. The industries in Syria and Iran are also in a bad shape,” he said,” Carpet is a luxurious item… you can’t expect people to buy carpets in time of economic hardship as posed by the Eurozone crisis.”
“We’ve not been able to finalise the figures of the total yarn exports in the immediate past fiscal. But the export to Syria is expected to stand at 10-15 thousand tones, while to Iran at 30-35 thousand tonnes,” said Karim, adding that the figures were much higher just four years back – about 30 thousand tonnes for Syria and about 60 thousand tonnes for Iran.
“The fall in the export to the Middle East has been recovered by the increase in export to India and China, but not to the full extent as India and China offer lower prices,” he added.
Within a scale of four-five years, the yarn export to India has creased from about 2.5 thousand tonnes to about 50.5 thousand tonnes. For China, it increased from about two thousand tonnes to about 55 thousand tonnes, according to BJSA records.
BJSA chairman Muhammad Shams-uz Zoha said, “The buyers of India are also becoming reluctant about paying us prices as high as before due to the devaluation of the Rupee (Indian currency) against the US dollar.”
Besides, the country’s yarn exporters are also facing a lower exchange rate of the US dollar with the Taka, as it has got appreciated against the greenback, he added.
“The yarn exporters are facing a cut in the profit due to many other reasons, including the increase in raw jute prices by 20 percent, transport cost by 20 percent, machine parts prices by 10 percent, jute batching oil (JBO) prices by 10 percent and the labour cost by 10 percent,” said Zoha.
Source: UNBConnect
