Bangladesh Struggles With Cotton Demand As Global Prices Spiral


Bangladesh apparel makers are facing the brunt of the trade war between US and China with cotton prices soaring to a four-year high of 85.5 cents per pound. The situation for the high-profile apparel exporting country has turned from bad to worse.

Only in November last, cotton was traded 70 cents and 71 cents a pound. In the month of April 2018, this had shot up to between 83 cents and 84 cents a pound in the international markets before it peaked at 85.5 cents a pound. Bangladesh Cotton Association (BCA) president, Medhi Ali confirmed the quandary of the Bangladesh apparel makers stating, “Yes, this is the highest price in the last three to four years.”

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The view expressed by Ali was resounded in the California Apparel News report which stated, “Since the Chinese government in April announced potential 25 percent retaliatory tariffs on US goods, many in the cotton industry have wondered about the consequences.”

The report added, “If implemented, the tariffs would affect about $50 billion in goods, $16.5 billion of which includes crops and food items the US sends to China.”

Disappointed with the state of affairs, Mohammad Ali Khokon, vice-president of the Bangladesh Textile Mills Association, expressed his view in a media statement, “It was our prediction that the price of cotton will go down this year, but we have been proven wrong as the price has started going up.”

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“If the cotton price goes up in the international market, our cost of production will go up further,” he added.

Ali observed, “Cotton price went up in the international markets also because of volatile political situation in the world, currency fluctuation and stockpiling of the raw material by major global traders.”

“If the price spiral continues, Bangladeshi importers might face troubles as almost all the demand of the raw material is met through import in absence of domestic production,” he concluded.

The situation turns more piquant as the local growers are unable to substitute for the cotton demand. As of now, they are only able to meet 3% of the cotton demand of Bangladesh and the rest 97% cotton is imported from India, the US, the Middle Eastern countries and some African countries.

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