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  • 6.1.2-MARKET PROFILES-WHAT KIND OF COTTON IS SUPPLIED FROM ABROAD, AND FROM WHICH COUNTRIES?

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  • What kind of cotton is supplied from abroad, and from which countries?

    Chapter 6 - Market profiles - Bangladesh 

     
     

    Bangladesh has three main cotton market segments:

    Cotton used to spin yarn in ring frames to be used for production of knit fabric for exports of knit garments. This is by far the largest segment of the market for cotton, having about 55% of the total market share. This market segment has been created in recent years with dramatic development in the composite knit garment sector. Companies in this sector buy yarns, knit their own fabrics, dyeing and finishing them according to the needs of their ultimate garment buyers, and sew and ship the finished garments direct to the chosen destinations of their buyers. This segment of market uses medium staple (1-3/32" to 1-1/8", or 27.8 mm to 28.6 mm) cotton imported mainly from Commonwealth of Independent States (CIS) countries, India and West Africa. The cotton used is of strict middling (SM) grade within the range 4.0–4.8 micronaire, having a minimum strength of 28.0 g/tex, a nep content of 180–240 neps/g and a minimum maturity ratio of 0.90.
    Cotton used to spin yarn in both ring and rotor frames for manufacture of woven fabric for the woven RMG sector. This segment has about 15% of the market, and uses both medium (1-3/32" to 1-1/8", or 27.8 mm to 28.6 mm) and short staple (1-1/32" to 1-1/16", or 26.2 mm to 27.0 mm) cotton imported mainly from CIS, India, Pakistan and the United States. Specifications for medium staple cotton are similar to those above, whereas for short staple cotton the mills use middling (M) and strict low middling (SLM) grades within the range 4.2–5.2 micronaire, having a minimum strength of 26.0 g/tex, a nep content of 200–300 neps/g and a minimum maturity ratio of 0.88.
    Cotton used to spin yarn in both ring and rotor frames for the domestic markets for handloom products, saris and towels. This segment has about 30% of the market, and uses long (1-5/16" to 1-7/16", or 33.3 mm to 36.5 mm), medium (1-3/32" to 1-1/8", or 27.8 mm to 28.6 mm) and short (1-1/32" to 1-1/16", or 26.2 mm to 27.0 mm) staple cotton imported from the United States (Pima), Sudan (Barakat), CIS, India, West Africa and Pakistan. Specifications for medium and short staples are similar to those described above; for long staple the mills use grade 2 cotton within the range 3.5–4.5 micronaire, having a minimum strength of 35 g/tex, nep content of 80–150 neps/g and a minimum maturity ratio of 0.90.

    Imports of cotton into Bangladesh

    Bangladesh imported 370,000 tons of cotton of various grades in 2004. In 2005 this increased to about 650,000 tons. By 2010 Bangladesh will, according to BTMA, be importing over 870,000 tons.

    Annual Import Payments 2004–2005, a publication of the Statistics Department of Bangladesh Bank, lists 89 countries to which payments were made for imports of cotton. These payment statistics may not reflect the value of annual imports of cotton, as there could be a time lag between imports and payments. However, this is a good source of information about the supplying countries and a general indication of the volume of cotton coming from those countries. The statistics reveal that payments to 20 countries accounted for more than 90% of total import payments. Total import payments in 2004/05 were valued at about $1.46 billion. The major suppliers were China, India, Uzbekistan and Hong Kong (China), accounting for about 57% of the total supplies.

    It is interesting to note that cotton from as many as 23 African countries also found its way to the Bangladesh market, although the volume was not particularly significant. Sudan and Burkina Faso appeared in the list of top 20 supplying countries, accounting for 1.6% of the total import payments for cotton, while payment to the other 21 African countries accounted for only 3.2% of the total import payments for cotton.

    Development of imports in the last five years

    Official statistics available from Bangladesh Bank on imports of cotton and yarn show that in 2004/05 Bangladesh imported cotton valued atTaka 40,960 million ($666 million) and cotton yarn worth Taka 24,140 million ($392 million).

    In the first 10 months of 2005/06, cotton imports amounted to Taka 39,570 million ($596 million) and yarn imports Taka 27,010 million ($407 million). The statistics reveal that there had been steady growth in imports of cotton and yarn over the last five years. Extrapolating from the figure for the first 10 months of 2005/06, for the whole year the growth in imports would be about 16%. In the previous three years imports grew by 19%, 51% and 27%. Imports of yarn also registered impressive growth, with 22% in 2003/04, 27% in 2004/05 and 34% (extrapolated for 12 months) in 2005/06. The increasing trend in the imports of yarn shows that the local spinning industry was unable to cope with the increasing demand for yarn.

    USDA’s estimates show an impressive growth in cotton imports: 

     

    Season (August–July) 
    Cotton imports (tons) 
    2000/01 
    220,000 
    2001/02 
    260,000 
    2002/03 
    350,000 
    2003/04 
    370,000 
    2004/05 
    400,000 
    2005/06 
    480,000 

     

    Prices

    Prices are ruled by the international market. Offered prices are normally checked by the buyer with the international prices published on the Internet.