Bangladesh turns to Africa to offset Indian cotton ban

http://www.thefinancialexpress-bd.com/more.php?news_id=99103&date=2010-05-03

Bangladesh turns to Africa to offset Indian cotton ban
Commerce minister says govt to facilitate import from African nations

Fazlur Rahman

Bangladesh plans to make Africa its main import source for cotton after India slapped a ban on export of the textile raw material, sending prices of yarn sky-rocketing in local market, commerce minister Faruk Khan said Sunday.

Khan unveiled the plan at a seminar in the city where leading cotton growers from Sub-Saharan Africa made the case for importing their “cheap” but “high quality” cotton to offset the fallout of Indian ban.

“We will utilise the scope to import low-cost but high quality cotton from the African countries,” the commerce minister said at the opening ceremony of ‘Bangladesh Cotton Marketing and Textile Training Event’ at a city hotel.

Bangladesh Textile Mills Association (BTMA), International Trade Centre (ITC) and Bangladesh Cotton Association (BCA) organised the two-day international event. Representatives from several African nations are taking parting in the event.

His comments came as the prices of yarn, which is made of spinning cotton, doubled to 90 cents a pound in April, driven by increased global demand and a ban on cotton export by second largest producer India.

Bangladesh, which almost imports cent per cent of its cotton from overseas and some 15 per cent from India, has been hard hit by the price hike.

Local spinners were forced to raise their yarn prices to the global level, affecting the knitwear manufacturers – the main users of yarn – at a time when the global apparel market showed signs of turnaround after two years of recession.

The commerce minister admitted the country’s apparel factory owners are currently “under pressure” due to abnormal hike in yarn prices in the global market and hoped that import from Africa would ease the pressure.

“The demand for cotton in Bangladesh will also help the African exporters,” Mr Khan said adding that the international seminar would help match-make African exporters and Bangladeshi importers.

He said there are some problems in importing cotton from Africa. “Those problems will be solved through discussion. The government will extend all-possible assistance to this effect.”

The minister said Bangladeshi exporters could now consider investing in overseas textile sector. “In that case, African can be the best place for investment.”

BTMA president Abdul Hai Sarker said the Sub-Saharan countries can become the country’s main source for cotton. “The African producers can easily meet up Bangladesh’s demand for cotton.”

Bangladesh on an average consumes 4 million bales of cotton a year, whereas the Sub-Saharan nations are capable of producing around 200 to 300 million bales of the textile raw material per year.

Mr Sarker said the African exporters have to improve shipment schedule to capture Bangladesh’s cotton market. “A shipment from Uzbekistan now takes around 15 days to reach Bangladesh against four months from the African countries.”

“We have proposed them to establish a buffer stock in Bangladesh’s ports so that we can bring cotton within two to three days to our factories.”

“They are also actively considering our proposal to set up buffer stock in the places convenient for Bangladeshi importers,” the BTMA president said.

Bangladesh Knitwear Manufacturers and Exporters Association president Fazlul Huq, BCA president Mohamamd Ayub and ITC programme manager Matthias Knappe also spoke on the occasion.