After more than a year the prices of yarn started rising because of rising trend of garment work orders from the international clothing retailers and brands.

Currently the widely consumed 30 carded yarn has been being sold between $3.20 and $3.30 per kilogram (kg). 

The 30 carded cotton fibre yarn was sold between $3.0 and $3.10 per kg, spinners said.

In some cases 30 carded yarn was sold even $2.90 per kg as the demand was low from the buyers.

The prices of yarn started rising over the last two weeks because of higher demand from the buyers.

The demand for yarn is rising as the inflow of work orders from the international clothing retailers and brands is increasing in the country with easing of inflationary pressure on the western consumers.

International economic situation and supply of clothing items 

The sudden rise in demand for yarn means that the international supply chain is rebounding as the inflation scaling down in the western world.

The consumers are well aware that the Russia Ukraine war is still going on and it still uncertain when and how the war will end. This is also a major cause for rebound in demand for apparels.

But, it is also important that the inflation declined significantly in the USA and European Union.

The euro area annual inflation rate was 5.5 percent in June 2023, down from 6.1 percent in May. 

A year earlier, the rate was 8.6 percent. European Union annual inflation was 6.4 percent in June 2023, down from 7.1 percent in May. A year earlier, the rate was 9.6 percent July 19, 2023.

Similarly, US Inflation Rate is at 3.18 percent compared to 2.97 percent last month and 8.52 percent last year. This is lower than the long term average of 3.28 percent.

The National Retail Federation (NRF) the largest retail federation of the USA in March  issued its annual forecast, anticipating that retail sales will grow between 4 percent and 6 percent in 2023. 

In total, NRF projects that retail sales will reach between $5.13 trillion and $5.23 trillion this year. 

“In just the last three years, the retail industry has experienced growth that would normally take almost a decade by pre-pandemic standards,” NRF President and CEO Matthew Shay said. 

“While we expect growth to moderate in the year ahead, it will remain positive as retail sales stabilize to more historical levels. Retailers are prepared to serve consumers in the current economic environment by offering a range of products at affordable prices with great shopping experiences,” said NRF President and CEO Matthew Shay.

NRF’s annual sales forecast was announced during the third annual virtual conversation, where retail executives from major brands, prominent economists and consumer experts discussed the health of American consumers and the retail industry.

The 2023 figure compares with 7 percent annual growth to $4.9 trillion in 2022. The 2023 forecast is above the pre-pandemic, average annual retail sales growth rate of 3.6 percent.

The demand for local yarn and fabrics has been increasing also because of maintaining strict lead time set by the international clothing retailers and brands.

For instance, previously the international retailers and brands used to allow 90 days to 120 days of lead time for which the local suppliers could make the garment from the imported yarn and fabrics.

But now the international retailers and brands allow 45 days to 60 days lead time or in some cases even 30 days lead time. As a result, the garment makers prefer local yarn and fabrics to imported yarn and fabrics.

What the industry insiders say 

Razeeb Haider, Managing Director at Outpace Spinning Mills Ltd said the prices of yarn started increasing but very slowly as work orders are rebounding to Bangladesh.

However, it is need to observe the trend of the inflow of work orders. If the trend continues for a long time then it is sustainable and if it does not continue for a long time it will not be sustainable, said Haider who spins yarn from cotton.

Razeeb Haider, Managing Director at Outpace Spinning Mills Ltd said, "the prices of yarn started increasing but very slowly as work orders are rebounding to Bangladesh."

Similarly, Khorshed Alam, chairman of Little Group also said the sales of yarn for both export oriented and for domestic factories have been increasing over the last two weeks.

The sales of the export oriented yarn increased as the international retailers and brands are placing increased volume of work orders and the sales of yarn for domestic consumption increased because of improvement of power supply in the major industrial belts like Narsingdi and Surajganj. 

The local weavers can weave the fabrics for long time for the improvement of power supply which mainly helped increasing the sales of yarn for the domestic markets, he added.

Because of rise in sakes of yarn some 25 percent of old unsold stockpiling of yarn has a dreary been sold out within two weeks, he said.

He also the sales of yarn meant for knitwear is higher than the yarn meant for woven fabrics as the demand for knitted items is higher from the international retailers and brands, he said.

Monsoor Ahmed, Chief Executive Officer of Bangladesh Textile Mills Association (BTMA) said the demand for yarn is rising because the production was low due to shortage of gas in the industrial units. 

Most of the spinning mills have been running 50 percent to 60 percent due to shortage of gas in the industrial units, he said. But the sales of the yarn has been rising because of higher demand from international retailers and brands due to improvement in inflation in the western world, he said.

Moreover, many spinners and millers could not import the cotton adequately because of the dollar shortage in the banking sector in the time of volatile economic situation locally and internationally because of severe fallouts from the covid 19 and Russia Ukraine war, Monsoor also said.

BTMA President Mohammad Ali Khokon also said the sales of yarn increased but very slowly. 

Faruque Hassan, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said work orders are coming and the demand for yarn in the local markets is also rising.