Black_cats
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Buy local yarn, textile millers urge garment makers in bid to ease pressure on reserves
Primary textile millers have demanded the woven and knit garment makers to buy yarn from local markets by opening back-to-back letters of credit (LCs) to reduce stockpiling of unsold yarn and ease the pressure on foreign reserves.
The textile millers also demanded that the government increase the allocation for the Export Development Fund (EDF) to $30million from $20million to overcome the crisis.
At the meeting, the BTMA also said their businesses had reduced by 50%.
Speaking at a press conference today, Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA), said the fall in business was a result of gas shortage, a flood of illegally-imported clothes and complications in opening LCs by banks due to shrinking of the EDF.
The local market was worth $3 billion worth of yarn in general, which has now come down to $500 million.
He alleged this was because of clothes coming in through unchecked luggage from Pakistan and India.
He also expressed worries about whether they could even pay the Eid salaries of workers and utility bills in June.
As a way out, Khokhon suggested ensuring loans for the sector that aren't classified due to failure of payment till June 2024.
The BTMA made similar demands in a letter to the Bangladesh Bank earlier in November last year.
It had urged the government to discourage yarn imports amid the ongoing dollar crisis as the local spinning mill owners have huge stockpiles due to a decline in demand.
The letter said the step would open a way to sell the stockpiled yarn.
The BTMA requested the central bank governor to take initiatives to discourage imports against back-to-back LCs to save dollars.
