Yarn syndicate profits as textile mills bear the losses
Collected Photo
Narsingdi is one of the country’s most important textile industry hubs. Once known for its handloom industry, the district has seen the growth of numerous textile mills with the expansion of modern power looms. Textile factories in the district produce 70 to 80 percent of the country’s demand for locally manufactured fabrics. However, repeated increases in yarn prices have put factories under pressure. Production costs have risen several times over, but fabric prices have not increased accordingly. Meanwhile, a syndicate is allegedly making hundreds of crores of taka by raising yarn prices.
Over the past month and a half, prices of different types of yarn have increased by Tk 30 to Tk 50 per pound. A visit to the yarn market in Madhabdi revealed that the price of 30-count yarn, which was Tk 120 to Tk 125 per pound just a month ago, has now risen to Tk 150 to Tk 160. The price of 40-count yarn has increased by an average of Tk 30 to Tk 190 to Tk 195. Meanwhile, 50-count yarn, previously priced at Tk 190, is now selling for Tk 215 to Tk 225. The most sought-after 80-count yarn has become Tk 35 more expensive per pound and is now selling for Tk 330 to Tk 350.
Allegations have emerged that yarn trading companies are repeatedly raising prices by creating artificial shortages. Prices are reportedly being increased in the morning, in the afternoon and even by the hour. By raising yarn prices, the syndicate has allegedly taken hundreds of crores of taka from textile and sizing mill owners over the past month and a half.
There are also allegations that although yarn is reportedly unavailable at wholesale outlets, it can still be obtained from various secret warehouses if buyers are willing to pay extra.
The situation has left textile factory owners in a difficult position. Although they have to purchase yarn at higher prices, they are being forced to sell fabrics at previous rates.
Owners of industrial establishments in Madhabdi said the yarn syndicate is controlled by several businesses, including Subrata Das’s Modern Trading, Nikhil Saha’s Anik Traders, Binoy Krishna’s Ananda Trading, Dolon Saha’s Dolon Training, Enayet Traders, Sarwar Traders, Haque Traders, GS Traders, Utpal Das’s Ishan Traders, Banani Traders and SP Traders, among several others.
Yarn is reportedly unavailable at wholesale outlets in Madhabdi market. However, supplies are being made available from different warehouses at higher prices. Visits to several yarn warehouses revealed that large quantities of yarn were being stockpiled. The prices are allegedly being increased by creating an artificial shortage despite the existing stocks.
Meanwhile, to keep their factories operational, industrial owners are continuing production while incurring losses of Tk 3 to Tk 5 per yard of fabric. Some establishments have reduced production by half due to the shortage of yarn.
Aslam Fakir, general secretary of the Chowala Textile Owners Association in Narsingdi, said, “When we go to the wholesale outlets, they say there is no yarn. There is one price in the morning and another in the afternoon. The weavers working for me have to keep their mills running. We also have to pay workers’ salaries. When we buy yarn at these prices and produce fabric, we incur a loss of Tk 3 to Tk 5 per yard.”
He alleged that yarn sellers were increasing prices arbitrarily.
Another textile mill owner, Mohiuddin, said, “I have been producing fabrics for 35 years, but I have never seen yarn prices rise like this. We weavers are being driven to ruin, while yarn owners are making hundreds of crores of taka through syndication. The yarn market has reached this state because there is no government monitoring. Due to the shortage of yarn, we are now operating only one shift.”
Zahirul Alam Khan, owner of Khan Textile, alleged that Nikhil Saha, manager of Modern Yarn Trading, controls the entire syndicate. He claimed that Saha alone controls the yarn supply of 30 spinning mills across the country.
To investigate how a yarn shortage could persist despite warehouses being full of stock, an Agamir Somoy reporter spoke to several of the businessmen accused of controlling the market. They denied the allegations and said yarn prices had increased due to rising cotton prices in the international market, reduced yarn supply and price hikes by spinning mill owners.
Nikhil Saha, manager of Modern Yarn Traders, said, “There is no yarn in the market, so prices have increased. Rising cotton prices are also a factor. Besides, the government has now stopped bonded yarn, which has increased the prices of yarn from domestic mills. There is no such thing as a syndicate in the market. If weavers had not bought yarn after the prices increased, yarn prices would not have gone up.”
Binoy Krishna, proprietor of Ananda Yarn Trading, said, “When prices increase, textile and sizing mill owners buy more yarn, which pushes prices up further. Spinning mill owners increased yarn prices, and we raised them afterward.”
Chandan, manager of Dolon Trading, said, “The big owners have increased yarn prices, not us. We run a small business.”
However, spinning mill owners denied increasing yarn prices. Farukuzzaman, general manager of NR Spinning Mill, said, “We have not increased yarn prices. Trading companies determine yarn prices in the market.”
Abu Saleh Chowdhury, president of the Madhabdi Market Merchants Association, said, “To keep this industry alive, yarn prices need to be determined in line with cotton prices.”
