In the backdrop of the Bangladesh Government’s proposed hike in price of gas produced from the captive power plants, textile mill owners in Bangladesh have expressed concern over falling behind on the competition in the event of such a price hike.
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“The spinning sub-sector will be in trouble if the Government increases the gas price again. Bangladeshi spinners will face pressures as international yarn producers will then supply products to the local industry at lower prices,” observed President of Bangladesh Textile Mills Association (BTMA) Tapan Chowdhury at a two-day conference of the World Cotton Outlook Summit in Dhaka recently, adding, “If the gas price is hiked, spinners will not be able to supply raw materials to the knitters and garment makers at competitive prices. In such a case, the local garment makers would depend on imported yarn.”
According to the BTMA President the demand for local yarn is higher due to shorter lead time and better quality.
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It may be mentioned here that Bangladesh Government last increased the gas price in September 2015 to Tk. 8.36 per cubic metre from Tk. 4.36, which it proposes to hike by about 130 per cent now to Tk. 19.22 per cubic metre for the captive power plants.
Opposing the proposed hike, first Vice-President of BGMEA Faqrue Hasan reportedly told a newspaper that due to increase of cost of production in China, an opportunity has been opened for Bangladesh garment sector to flourish further, which could be hampered if gas price increased any more.
