Bangladesh now depends less on India for cotton

[Black_cats]

12:00 AM, May 14, 2019 / LAST MODIFIED: 12:35 AM, May 14, 2019
Bangladesh now depends less on India for cotton

African nations become largest source

Refayet Ullah Mirdha

African nations have surpassed India to become the largest source of cotton for Bangladesh as local spinners and millers look to cut down their dependence on a single source for their vital raw material.

Last year, Bangladesh, the largest importer of cotton in the world, met 37.06 percent of its requirement for the white fibre from East and West African countries.

India accounted for 26.12 percent of the total cotton imports, down from more than 60 percent two years ago, according to data from the Bangladesh Textile Mills Association (BTMA).

Last year, 11.35 percent of the cotton came from the CIS (Commonwealth of Independent States) countries, 11.14 percent from the US, 4.65 percent from Australia and 9.65 percent from the rest of the world.

The low quality of the Indian cotton is the main reason behind the falling imports from the neighbouring country, said Monsoor Ahmed, secretary of the BTMA.

A section of Indian cotton traders also cannot maintain timely shipment and deliver the right quantity of cotton as per agreement, said Mehdi Ali, president of the Bangladesh Cotton Association.

For example, it is written in the letter of credit that there may be 3 to 4 percent less cotton than the amount agreed upon when the imported fibre is weighed in Bangladesh. But in many cases it is 10 to 15 percent less.

“This is a big loss for us. We can’t afford these kind of losses. This is another reason for moving away from India,” Ali added.

The concentration of moisture in the Indian cotton is higher than in other countries’, which makes it difficult to store in the warehouses for a long time.

Last year, Bangladesh imported 8.28 million bales of cotton (one bale equals to 282 kilogrammes). In dollar terms, the imports are worth $3 billion.

The country produced 1.65 lakh bales of cotton last fiscal year, which is less than 3 percent of the annual demand for 10 million bales.

In order to bump up local production, state-run Cotton Development Board is looking for new farming lands in hilly and swamp areas in various districts along with the existing farming areas in Jashore, Rangpur, Dinajpur, Rajshahi, Gazipur and Mymensingh.

The board hopes to produce 2.5 lakh bales of cotton by 2021, which will meet nearly 5-7 percent of the local consumption.

Bangladesh’s cotton imports will continue to be commensurate with the expansion in spinning, according to the latest report of the United States Department of Agriculture.

Global consumption is forecast to grow to a record of about 126 million bales.

Growth is slightly above the long-term average and is expected to remain the same in all of the top 10 spinning countries except Indonesia, with continued strong growth forecast for Vietnam and Bangladesh, the report added.

https://www.thedailystar.net/business/news/bangladesh-now-depends-less-india-cotton-1743343

 

[mb444]

BD needs to push through its plans to lease land for farming in african countries.
BD upcoming sovereign funds should be used to support such programme to diversify our sources of raw materials as well as food.

 

[Indus Pakistan]

How the fcuk do you guys manage to import raw cotton from other side of the world [West Africa], process it, convert and sell as garments at prices that are lower then anything our so called industrialists can do and still make a profit?

 

[Nilgiri]

How the fcuk do you guys manage to import raw cotton from other side of the world [West Africa], process it, convert and sell as garments at prices that are lower then anything our so called industrialists can do and still make a profit?

Cheap shipping costs (so supplier distance dont matter that much) and everything in BD (population, factories) being close to its ports to export (no big reliance on internal logistics) and lot of big wide rivers to transport stuff even if roads/rail is bad. Remember what I said in other thread about Karachi SEZ idea? Similar thing, but inherited naturally....imagine sialkot triangle being smack bang on the coastline....there's your answer.

BD also gets 0 tariff access so that helps too...but Pakistan more or less has the same such tariff access when we are talking about US and EU and developed markets in general I believe....so the major differences lie elsewhere.

Plus Bangladeshis have a good hard work ethic (and willing to put women to work) when it comes to this sector....and they have provided good local power infra for the factories and flexible seasonal employment norms etc....so they are not super encumbered by hiring legislation and power cuts and stuff like that. So time sensitivity is much improved.

 

[Bilal9]

How the fcuk do you guys manage to import raw cotton from other side of the world [West Africa], process it, convert and sell as garments at prices that are lower then anything our so called industrialists can do and still make a profit?

It's called efficiency brother. By working with overseas suppliers and importers, we have slowly gotten used to western levels of efficiency. Expectations of timeliness and quality HAVE to be met, when your sole source of large income is exports.

On a separate note, Indian and Pakistani producers are relatively lazy and have gotten used to Non-tariff barriers, protected markets etc.

For the longest time we had none of these protections, the importer lobbies were very strong and essentially kept import duties super low, which largely benefited India and China, so local producers had to get super efficient in every facet. The govt. has changed policy direction recently so all kinds of industrial FDI is rushing in now.

 

[Nilgiri]

On a separate note, Indian and Pakistani producers are relatively lazy and have gotten used to Non-tariff barriers, protected markets etc.

And bangladeshis have also gotten used to their low intelligence.

By working with overseas suppliers and importers, we have slowly gotten used to western levels of efficiency.

More like 0 tariffs.....start level playing field...and guess what creeps up again:

https://defence.pk/pdf/threads/bang...to-economic-trade.617775/page-8#post-11453823

The govt. has changed policy direction recently so all kinds of industrial FDI is rushing in now.

LOL...nope! No sustained orders from stuff promised as way back as 2015....incl your hyper-sensitive self-preening homo self.

2015: Refrigerator exports!!!!! 2018: erm 42,000 USD worth? ok!

 

[Homo Sapiens]

12:00 AM, May 14, 2019 / LAST MODIFIED: 12:35 AM, May 14, 2019
Bangladesh now depends less on India for cotton

African nations become largest source

Refayet Ullah Mirdha

African nations have surpassed India to become the largest source of cotton for Bangladesh as local spinners and millers look to cut down their dependence on a single source for their vital raw material.

Last year, Bangladesh, the largest importer of cotton in the world, met 37.06 percent of its requirement for the white fibre from East and West African countries.

India accounted for 26.12 percent of the total cotton imports, down from more than 60 percent two years ago, according to data from the Bangladesh Textile Mills Association (BTMA).

Last year, 11.35 percent of the cotton came from the CIS (Commonwealth of Independent States) countries, 11.14 percent from the US, 4.65 percent from Australia and 9.65 percent from the rest of the world.

The low quality of the Indian cotton is the main reason behind the falling imports from the neighbouring country, said Monsoor Ahmed, secretary of the BTMA.

A section of Indian cotton traders also cannot maintain timely shipment and deliver the right quantity of cotton as per agreement, said Mehdi Ali, president of the Bangladesh Cotton Association.

For example, it is written in the letter of credit that there may be 3 to 4 percent less cotton than the amount agreed upon when the imported fibre is weighed in Bangladesh. But in many cases it is 10 to 15 percent less.

“This is a big loss for us. We can’t afford these kind of losses. This is another reason for moving away from India,” Ali added.

The concentration of moisture in the Indian cotton is higher than in other countries’, which makes it difficult to store in the warehouses for a long time.

Last year, Bangladesh imported 8.28 million bales of cotton (one bale equals to 282 kilogrammes). In dollar terms, the imports are worth $3 billion.

The country produced 1.65 lakh bales of cotton last fiscal year, which is less than 3 percent of the annual demand for 10 million bales.

In order to bump up local production, state-run Cotton Development Board is looking for new farming lands in hilly and swamp areas in various districts along with the existing farming areas in Jashore, Rangpur, Dinajpur, Rajshahi, Gazipur and Mymensingh.

The board hopes to produce 2.5 lakh bales of cotton by 2021, which will meet nearly 5-7 percent of the local consumption.

Bangladesh’s cotton imports will continue to be commensurate with the expansion in spinning, according to the latest report of the United States Department of Agriculture.

Global consumption is forecast to grow to a record of about 126 million bales.

Growth is slightly above the long-term average and is expected to remain the same in all of the top 10 spinning countries except Indonesia, with continued strong growth forecast for Vietnam and Bangladesh, the report added.

https://www.thedailystar.net/business/news/bangladesh-now-depends-less-india-cotton-1743343

This is a very very good development. I was actually very worried about dependency on India for cotton. Now just 26 percent cotton are coming from India which is likely to reduce farther.

 

[TopCat]

BD needs to push through its plans to lease land for farming in african countries.
BD upcoming sovereign funds should be used to support such programme to diversify our sources of raw materials as well as food.

No need.. Jhamelar dorkar nai

Cheap shipping costs (so supplier distance dont matter that much) and everything in BD (population, factories) being close to its ports to export (no big reliance on internal logistics) and lot of big wide rivers to transport stuff even if roads/rail is bad. Remember what I said in other thread about Karachi SEZ idea? Similar thing, but inherited naturally....imagine sialkot triangle being smack bang on the coastline....there's your answer.

BD also gets 0 tariff access so that helps too...but Pakistan more or less has the same such tariff access when we are talking about US and EU and developed markets in general I believe....so the major differences lie elsewhere.

Plus Bangladeshis have a good hard work ethic (and willing to put women to work) when it comes to this sector....and they have provided good local power infra for the factories and flexible seasonal employment norms etc....so they are not super encumbered by hiring legislation and power cuts and stuff like that. So time sensitivity is much improved.

BD created many loyal buyers despite all the hardship.. It takes time.. you need to create trust to get to the level where we are now.
Indian sellers lost cotton market in BD because they are not committed.. Same can be said to the Pakistanis.. They failed to create market for their product mostly due to trust deficit. People still buys from China despite higher cost and tariff because they know they gonna get their product shipped on the right time and with agreed quality.

 

[bluesky]

No need.. Jhamelar dorkar nai


BD created many loyal buyers despite all the hardship.. It takes time.. you need to create trust to get to the level where we are now.
Indian sellers lost cotton market in BD because they are not committed.. Same can be said to the Pakistanis.. They failed to create market for their product mostly due to trust deficit. People still buys from China despite higher cost and tariff because they know they gonna get their product shipped on the right time and with agreed quality.

You are a genius. You have pinpointed the issues with both Africa and India.

 

[Bengal71]

How the fcuk do you guys manage to import raw cotton from other side of the world [West Africa], process it, convert and sell as garments at prices that are lower then anything our so called industrialists can do and still make a profit?

Bengal is the historical textile powerhouse of the world. After the destruction of the industry by the British, it was only a matter of time we will restore our former capability. We were the sole producer of the finest Muslin for hundreds of years.

What about Pakistan? I hear they are one of the largest growers of cotton, can't we import from them too?

No need.. Jhamelar dorkar nai

Agreed, hudai kechal. Exporter er ovab nai.

 

[Homo Sapiens]

Bengal is the historical textile powerhouse of the world. After the destruction of the industry by the British, it was only a matter of time we will restore our former capability. We were the sole producer of the finest Muslin for hundreds of years.

True, During the Dutch golden ages in 17th century, 40% of all import by the Dutch from Asia was from Bengal. More than 50% of textile and 80% silk clothes imported by Dutch was from Bengal. Bengals ship building industry, textile industry was world famous. Living standard in Bengal was comparable to Britain. Which had the highest living standard in those days in Europe.

From wikipedia-

Under Mughal rule, Bengal operated as a center of the worldwide muslin, silk and pearl trades.[31] Domestically, much of India depended on Bengali products such as rice, silks and cotton textiles. Overseas, Europeans depended on Bengali products such as cotton textiles, silks and opium; Bengal accounted for 40% of Dutch imports from Asia, for example.[32] Bengal shipped saltpeter to Europe, sold opium in Indonesia, exported raw silk to Japan and the Netherlands, and produced cotton and silk textiles for export to Europe, Indonesia and Japan.[33] Real wages and living standards in 18th-century Bengal were comparable to Britain, which in turn had the highest living standards in Europe.[34]

During the Mughal era, the most important center of cotton production was Bengal, particularly around its capital city of Dhaka, leading to muslin being called "daka" in distant markets such as Central Asia.[35] Bengali agriculturalists rapidly learned techniques of mulberry cultivation and sericulture, establishing Bengal as a major silk-producing region of the world.[36] Bengal accounted for more than 50% of textiles and around 80% of silks imported by the Dutch from Asia, for example.[32]

Bengal also had a large shipbuilding industry. Indrajit Ray estimates shipbuilding output of Bengal during the sixteenth and seventeenth centuries at 223,250 tons annually, compared with 23,061 tons produced in thirteen colonies in North America from 1769 to 1771.[37] He also assesses ship repairing as very advanced in Bengal.[37] Bengali shipbuilding was advanced compared to European shipbuilding at the time. An important innovation in shipbuilding was the introduction of a flushed deck design in Bengal rice ships, resulting in hulls that were stronger and less prone to leak than the structurally weak hulls of traditional European ships built with a stepped deck design. The British East India Company later duplicated the flushed-deck and hull designs of Bengal rice ships in the 1760s, leading to significant improvements in seaworthiness and navigation for European ships during the Industrial Revolution.[38]

https://en.wikipedia.org/wiki/Economy_of_Bangladesh
https://en.wikipedia.org/wiki/Muslin_trade_in_Bengal

 

[Arthur]

@Bilal9 bhai, see this is what I mentioned to you last year.

How the fcuk do you guys manage to import raw cotton from other side of the world [West Africa], process it, convert and sell as garments at prices that are lower then anything our so called industrialists can do and still make a profit?

Being in the business for 4 decades helps.

Pakistan should also use it's huge cotton production & set up RMG targeting Chinese & ME market. This will help you with creating jobs for poor & women and in turn, help you with tackling religious conservatives & extremism.

 

[bluesky]

What about Pakistan? I hear they are one of the largest growers of cotton, can't we import from them too?

An excerpt:

"Pakistan Exports to Bangladesh of Cotton was US$546.69 Million during 2017, according to the United Nations COMTRADE database on international trade".

 

[fallstuff]

It's called efficiency brother. By working with overseas suppliers and importers, we have slowly gotten used to western levels of efficiency. Expectations of timeliness and quality HAVE to be met, when your sole source of large income is exports.

On a separate note, Indian and Pakistani producers are relatively lazy and have gotten used to Non-tariff barriers, protected markets etc.

For the longest time we had none of these protections, the importer lobbies were very strong and essentially kept import duties super low, which largely benefited India and China, so local producers had to get super efficient in every facet. The govt. has changed policy direction recently so all kinds of industrial FDI is rushing in now.

The entire supply chain is now being locally processed starting from spinning, textile manufacturing, dyes, and of-course garments manufacturing. I think there is a push now to produce the manufacturing machines such as the sewing, presses, and cutters to make or assemble in Bangladesh.

 

[Bilal9]

@Bilal9 bhai, see this is what I mentioned to you last year.

Being in the business for 4 decades helps.

Pakistan should also use it's huge cotton production & set up RMG targeting Chinese & ME market. This will help you with creating jobs for poor & women and in turn, help you with tackling religious conservatives & extremism.

Pakistan's labor rate for some odd reason is too high, a lot higher than India even.

Our garments labor rate is one third that of India. Plus Indian (as well as Pakistani) factories are too small and inefficient with less than 100 workers on average, classic sweatshop scenario. Bangladeshi factories were designed to mimic Korean or Taiwanese factories (and their efficient layouts) from the get go in the seventies - for both apparel and various types of shoe production. On average they employ about 300 to 500 workers.